rim  Insurance 


I^beri  P  Barbour 


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rHE  SPECmTOR  COMPANY 


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..the:' 

AGENts  Key 

TO 

Fire  Insurance 


Concise  and  Helpful  Information 

FOR  Agents,  Brokers  and  Field  Men 

Regarding  Essentials 

OF  THE  Business 


includes  a  comprehensive 
collection  of  modern  forms 


By 

Robert  P.  Barbour 


Price,  $3.50 


I  922 


THE  SPECTATOR  COMPANY 

Chicago  Office  135  William  Street 

Insurance  Exchange  NEW  YORK 


Copyright,  1917,  by 

THE  SPECTATOR  COMPANY 

New  York 


Second  Edition 

Copyright,  1920,  by 

THE  SPECTATOR  COMPANY 

New  York 


Third  Edition 

Copyright,  1922,  by 

THE  SPECTATOR  COMPANY 

New  York 


PREFACE   TO   THIRD   EDITION 


The  revision  of  the  "Key"  for  its  Third  Edition 
introduces  subjects  not  dealt  with  in  previous  editions. 
Many  chapters  have  been  rewritten  and  new  informa- 
tion added;  the  latest  and  most  modern  forms  in- 
cluded; all  that  it  may  be  as  complete,  up-to-date  and 
helpful  as  possible  within  the  limits  of  its  scope. 

This  book  is  designed  to  give  in  a  simple  and  clear  way, 
free  from  technicalities,  information  regarding  those  fire 
insurance  principles,  systems  and  practices  with  which 
the  agent,  broker  and  fieldman  should  be  familiar  in 
order  to  give  the  maximum  of  service  to  his  clients. 

Since  it  is  primarily  intended  as  a  practical  aid  to 
those  coming  directly  in  touch  with  the  policyholder, 
particular  attention  is  given  to  those  subjects  which 
experience  shows  are  constantly  arising  in  one  form 
or  another  in  the  office  and  outside  work  of  the  agent 
and  the  broker. 

These  subjects  cover  a  wide  range  and  deal  with 
agents'  and  brokers'  relations  with  the  company  and 
the  insured,  the  scope  of  their  authority  and  responsi- 
bility, soliciting,  office  systems,  policy  writing,  prepara- 
tion of  forms  and  clauses,  explanation  of  the  policy 
contract,  the  principal  clauses  used  and  the  various 
covers  written  by  fire  insurance  companies,  cancella- 
tions, collection  of  premiums,  adjustment  of  losses  and 
many  other  subjects  embraced  in  the  field  of  their 
operations.  It  brings  together  in  one  volume  infor- 
mation often  difficult  to  find  and  much  that  is  not 
obtainable  in  any  other  publication.  That  which  is 
elemental  is  considered  necessary  in  order  that  the 
treatment  of  each  subject  may  not  be  incomplete. 

Every  effort  has  been  made  to  represent  the  best 
judgment  of  those  recognized  as  leaders  in  the  business 
and  grateful  acknowledgment  is  rendered  to  friends 
who  have  contributed  by  suggestion,  information  or 
advice,  in  the  preparation  of  this  volume. 

It  should  not  be  overlooked  that  the  laws  of  the 
various  states  differ  and  care  should  be  exercised  that 
nothing  herein  shall  lead  to  violation  or  disregard  of 
the  statutes  of  any  particular  state. 

THE  AUTHOR. 


CONTENTS 

PART  ONE 

PAGE 

Chap.        I.  Fire  Insurance  1 

II.  The  Agent  11 

III.  The  Broker   16 

IV.  Insurance  Organizations 19 

V.  General  Office  Work   30 

VI.    .Writing     Policies     and    Endorse- 
ments        55 

VII.    Losses  66 

VIII.     The  Policy  Contract 88 

IX.  Waiver  and  Estoppel  by  Agent...   116 

X.     Selection  and  Inspection 119 

XL     Rates  and  Rating  Methods 131 

XII.  Cancellation  and  Substitution...   134 

XIII.  Mortgagee  and  Payee  Interests...   147 

XIV.  Important    Clauses    (Coinsurance 
AND  Others)    . . ., 157 

XV.     Special  Kinds  of  Insurance  (Side 

Lines)  173 


PART  TWO 

PAGE 

Chap.  XVI.    Forms,  Privileges  and  Clauses 195 

Div.         I.     Writing  Forms 197 

"          II.     Special  Agreements   204 

"        III.     Residence  Property    215 

"         IV.     Churches,   Schools,  Colleges  and  Public 

Buildings  and  Contents 237 

"  V.     Mercantile    and    Office    Buildings    and 

Their  Contents  245 

"        VI.     Hotels,     Saloons,    Clubs    and    Business 

Stables  and  Their  Contents   255 

"       VII.     Elevators,  Warehouses  and  Cold  Storage 

Houses  and   Their  Contents 262 

"     VIII.     Manufacturing  Buildings  and  Contents  277 

"        IX.     Miscellaneous   Non-Manufacturing    292 

"          X.     Vessel   Property 311 

"        XT.     Marine  Insurance 320 

"       XII.     Cotton  and  Cotton  Seed "ill 

"     XIII.     Rent  and  Leasehold   348 

"     XIV.     Use   and    Occupancy,    Profits   and  .Com- 
missions     370 

"       XV.     Excess,     Floating     and     General     Cover 

Contracts    407 

"     XVI.     Miscellaneous 421 

General  Index 437 


The  Agents  Key  to  Fire  Insurance 


PART   ONE 


CHAPTER  I 
FIRE  INSURANCE 

Its  Nature — By  Whom  Furnished — Stock  Compa- 
nies— Mutuals — Inter-insurance  Associations — 
Lloyds — Factory  Insurance  Association — Western 
Factory  Insurance  Association. 

Fire  insurance,  as  the  term  is  commonly  used,  is  an  under- 
taking by  the  insurer,  expressed  in  a  contract  known  as  the 
** policy",  to  indemnify  those  insured  for  monetary  loss  sus- 
tained through  damage  or  destruction  by  fire  of  specified 
property.  The  organizations  selling  fire  insurance  depend 
upon  the  monej^  paid  therefor  by  the  whole  number  insured 
to  reimburse  such  of  their  number  as  suffer  losses.  Thus  for 
a  small  and  fixed  premium  one  is  insured  against  possible 
large  and  uncertain  losses. 

Hence,  in  its  broader  meaning,  fire  insurance  may  be  de- 
fined  as   a  system  for  distributing  the   cost  of  fires.     The 

burden  of  reimbursing  those  who  suffer  losses 
Its  Nature        from  fire  is  borne  by  the  entire  body  of  those 

who  insure.  The  money  paid  for  fire  insurance 
indemnity,  namely  the  premium,  is  the  contribution  of  the 
individual  to  the  common  fund  from  which  losses  are  in 
turn  disbursed.  Each  insured  pays  a  rate  that  is  fixed  in 
accordance  with  the  estimated  risk  of  fire  damaging  his 
property,  plus  the  necessary  expenses  and  profit  of  the  com- 
panies and  associations  that  constitute  the  agencies  through 
which  this  distribution  is  effected. 

The  fire  insurance  policy  constitutes  one  of  the  most  nearly 
universal  contracts  undertaken  and  it  enters  into  practically 
all  activities  dealing  with  tangible  property. 

It  is  estimated  that  60%  of  all  realty  in  the  United  States 
is  encumbered  by  mortgage,  and  as  the  mortgagee  commonly 
demands  the  protection  of  fire  insurance,  the 
A  Necessity  statement  may  well  be  made  for  that  reason 
alone,  if  no  other,  that  fire  insurance  touches 
every  home,  every  trade,  every  business,  every  industry,  and 
that  upon  it  rests  in  large  measure  the  vast  system  of  credit, 

1 


2  THE.AgE^M.TS  KEY<TO't:iRE  INSURANCE 

without  which  commerce  would  be  dwarfed  and  the  wheels 
of  industry  find  difficulty  in  moving.  The  merchant,  the 
manufacturer,  or  the  warehouseman,  seeking  credit  from 
his  bank  to  pay  for  goods  purchased  or  stored,  must  insure 
to  obtain  a  loan.  All  through  our  commercial  life  the  seller 
on  credit  universally  relies  for  a  part  of  his  security  on  the 
buyer's  fire  insurance  protection.  Like  the  banking  system, 
the  importance  and  useful  purpose  of  fire  insurance  is  uni- 
versally conceded,  and,  since  creditors  rely  on  its  protection, 
the  necessity  for  stable  and  reliable  indemnity  is  quite  as 
vital  to  the  home  and  business  life  of  our  country  as  sound 
banking  or  undebased  currency.    • 

The  economic  importance  of  fire  insurance  and  the  ability 
of  the  present  system  of  indemnity  to  serve  its  purpose  is 

illustrated  again  and  again  in  the  vast  number 
Economic  of  losses  paid  each  year  which  would  otherwise 

Importance      fall  Avith  crushing  force  upon  the  individual 

owners,  the  sums  so  paid  in  the  year  1921 
aggregating  about  $446,160,000  in  the  United  States  alone.  It 
is  even  more  sharply  illustrated  in  the  case  of  conflagrations 
such  as  that  of  San  Francisco,  where  the  fire  insurance 
companies  paid  approximately  $300,000,000  for  property 
burned  or  otherwise  destroyed.  This  great  fire  loss  also 
shows  that  no  city,  nor  even  a  State,  could  afford  to  take 
the  risk  of  furnishing  indemnity  to  its  citizens;  the  dis- 
tribution of  the  fire  cost  must  be  over  a  wider  field  and  with 
a  greater  number  of  contributors  in  order  to  provide  the 
necessary  resources  for  times  of  stress. 

While  insurance  companies  serve  this  useful  and  necessary 
purpose  they  are  in  no  sense  benevolent  institutions  any  more 
than  banks  are.  They  are  formed  and  oper- 
Companies  ated  in  the  hope  of  making  money,  and  if  the 
Entitled  to  capital  invested  in  insurance  companies  yielded 
Reasonable  no  return  it  w^ould  be  withdrawn.  Such  corn- 
Profit  panics  are  entitled  to  a  reasonable  under- 
writing profit,  and  much  discussion  as  to  what 
that  should  be  has  resulted  in  a  fairly  well  defined  senti- 
ment that  an  average  underwriting  profit  of  5%  is  one  with 
which  the  companies  as  a  whole  should  be  satisfied,  and  to 
which  the  public  whom  they  serve  should  not  object.  To 
average  5%  there  must  be  some  years  when  the  profit  is 
greater,  for  there  will  inevitably  be  some  when  it  is  less; 
there  are  lean  years  and  fat  years;  the  fire  fiend  is  no  re- 
specter of  limits,  trade  profits,  or  surplus. 


FIRE    INSURANCE  6 

Such  5%  profit,  however,  does  not  take  into  account  the 
conflagrations  which  experience  shows  visit  our  country 
periodically  and  to  build  up  a  reserve  to  promptly  pay  losses 
sustained  in  such  catastrophes  it  is  generally  considered  that 
3%  additional  profit  is  necessary.  Some  States  have  laws 
specifying  that  rates  shall  be  reduced  when  stock  fire  in- 
surance companies  shall  show,  as  a  Avhole,  an  actual  profit  in 
excess  of  a  reasonable  amount  over  a  period  of  5  consecutive 
years.  The  justice  of  the  normal  profits  outlined  in  the 
foregoing  has  been  recognized  by  an  agreement  between 
representatives  of  the  National  Board  of  Fire  Underwriters 
and  the  National  Convention  of  Insurance  Commissioners 
as  follows: 

1.  The  minimum  '^reasonable"  underwriting  profit  is  5% 
of  premiums  earned  plus  3%  additional  for  conflagrations. 

2.  Five  years  is  a  minimum  term  upon  which  to  base  a 
calculation  as  to  underwriting  profits. 

3.  The  difference  between  earned  premiums  and  incurred 
losses,  plus  incurred  expenses,  represents  underwriting  profit 
or  loss. 

4.  A  conflagration  is  defined  as  property  loss  exceeding 
$1,000,000. 

5.  In  determining  the  underAvriting  experience  in  any 
given  state  the  first  $1,000,000  of  loss  shall  be  charged  to 
the  particular  state  and  the  balance  distributed  among  all 
the  states  (including  the  one  in  which  it  occurred)  in  propor- 
tion to  the  premium  income  of  each. 

6.  That  no  part  of  the  so-called  ''banking"  profit  shall 
be  included  in  the  underwriting  profit. 

What  panics  are  to  banks,  conflagrations  are  to  fire  in- 
surance companies,  and  such  institutions  must  husband  their 

resources  and  vitality  to  stand  the  strain  when 
Sound  it  comes.    To  the  individual  every  fire  is  a  con- 

Indemnity         flagration,   therefore   his   interest   in   securing 

sound  indemnity  is  vital,  and  the  first  duty 
of  the  agent  or  broker  is  to  make  certain  that  the  insurance 
he  places  for  his  client  shall  be  in  companies  that  are 
financially  sound  and  in  good  repute. 

CLASSES  OF  COMPANIES 

Fire  insurance  indemnity  in  the  United  States  is  furnished 
bj^  three  general  classes  of  insurers,   (1)   Stock  Companies, 


4  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

(2)    Mutual    Companies,    Reciprocals    and    Inter-insurance 
Associations,  (3)  Lloyds  Groups  or  Associations. 

Stock  Companies.     These  may  be  classed  as  of  two  kinds. 

While  each  state  terms  all  companies  * 'foreign"  that  are 
not  domiciled  in  and  organized  under  its  own  laws,  it  is 
the  common  practice  to  term  all  companies  ''domestic"  that 
are  organized  under  the  laws  of  any  one  of  the  48  States, 
and  "foreign"  all  those  organized  in  some  other  country. 

At  the  beginning  of  1922  there  were  about  290  domestic 
stock  fire  insurance  companies,  430  Mutuals  (not  including 
over  2,000  small  farm  associations)  and  91  foreign  companies, 
(not  counting  those  non-admitted)  transacting  a  fire  insur- 
ance business  within  the  United  States. 

The  requirements  of  the  various  States  relating  to  capital, 
deposits,  investments,  etc.,  differ  to  a  considerable  extent, 
but  those  of  New  York  State  will  serve  as  illustrations. 

Domestic  stock  companies  chartered — or  admitted — to  con- 
duct the  fire  insurance  business  in  the  State  of  New  York 

must  have  a  capital,  fully  paid,  of  not  less 
Requirements  than  $200,000  and  not  less  than  $400,000  to 

transact  both  fire  and  marine  business.  For- 
eign companies  must  maintain  on  deposit  with  the  Superin- 
tendent of  Insurance  in  approved  securities  an  amount  not 
less  than  the  minimum  capital  required  of  domestic  com- 
panies to  transact  a  like  business,  and  must  also  execute 
a  trust  deed  and  place  in  the  hands  of  trustees  approved 
by  the  Insurance  Department  the  sum  of  $300,000  in  cash 
or  approved  securities  to  do  a  fire  business  only  or  $400,000 
to  do  both  fire  and  marine  business.  Both  domestic  and 
foreign  companies  must  set  aside  a  certain  portion  of  all 
premiums  as  a  reserve  fund,  and  must  have  at  all  times 
net  assets  equal  to  or  exceeding  the  amount  of  said  reserve 
and  all  other  liabilities.  This  is  called  the  unearned  pre- 
mium reserve  and  is  estimated  to  be  sufficient  to  reinsure 
or  carry  to  maturity  all  its  outstanding  liability.  Therefore, 
the  measure  of  a  company's  strength  is  not  its  capital  so 
much  as  its  surplus,  and  the  proportion  this  bears  to  the 
amount  of  business  it  is  writing.  All  admitted  resources, 
other  than  premiums  or  other  items  in  course  of  collection, 
must  be  in  cash,  or  on  deposit  in  banks,  or  invested  in 
properties  or  securities  approved  by  the  Superintendent  of 


FIRE    INSURANCE  0 

Insurance,  which  are  designated  by  law  as  follows:  Bonds 
of  the  United  States  or  any  political  division  thereof,  or 
collateral  loans  on  the  pledges  of  such  securities,  or  bonds 
and  mortgages  on  improved,  unincumbered  real  property 
worth  fifty  per  centum  more  than  the  amount  loaned  thereon ; 
stocks,  bonds,  and  other  evidences  of  indebtedness  of  any 
solvent  institution  incorporated  under  the  laws  of  the  United 
States  or  of  any  State  thereof.  Foreign  companies  may 
invest  (to  the  extent  of  the  minimum  deposit  capital  re- 
quired) in  securities  of  their  own  country,  if  Americjan  com- 
panies are  reciprocally  privileged  in  the  countries  of  such 
foreign  companies'  origin.  All  of  these  requirements  are 
intended  to  secure  for  the  policyholder  the  safety  of  his 
indemnity.  Policies  of  insurance  issued  by  such  companies 
are  written  for  a  stated  premium,  are  non-assessable  and 
do  not  participate  in  the  earnings. 

Such   companies  may  write  the   following  classes  of  in- 
surance (1922): 

**  Against  loss  or  damage,  including  loss  of  use  or  occu- 
pancy, by  fire,  lightning,  windstorm,  tornado,  cyclone, 
earthquake,  hail,  frost  or  snow,  weather  or 
Classes  of  climatic  conditions,  including  excess  or  de- 
Insurance  ficiency  of  moisture,  flood,  rain  or  drought, 
rising  of  the  waters  of  the  ocean  or  its  tribu- 
taries, bombardment  or  invasion,  insurrection,  riot,  civil 
war  or  commotion,  military  or  usurped  power,  and  by 
explosion  whether  fire  ensues  or  not  (except  damage  to 
steam  boilers  and  similar  apparatus  caused  by  inherent 
explosion),  also  against  loss  or  damage  by  insects  or 
disease  to  farm  crops  or  products  and  loss  of  rental  value 
of  land  used  in  producing  such  crops  or  products  and 
also  against  loss  or  damage  by  water  or  other  fluid  to  any 
goods  or  premises  arising  from  the  breakage  or  leakage 
of  sprinklers,  pumps  or  other  apparatus  erected  for  ex- 
tinguishing fires,  or  of  other  conduits  or  containers  or  by 
water  entering  through  leaks  or  openings  in  buildings  and 
of  water  pipes,  and  against  accidental  injury  to  such 
sprinklers,  pumps,  apparatus,  conduits,  containers  or  water 
pipes  and  upon  vessels,  boats,  cargoes,  goods,  merchandise, 
freights,  and  other  property  against  loss  or  damage  by  all 
or  any  of  the  risks  of  lake,  river,  canal  and  inland  navi- 
gation and  transportation, ' '  and  all  forms  of  marine  cover, 
''insurances   upon   automobiles   and   airplanes,   seaplanes, 


b  THE   AGENTS    KEY    TO    FIRE    INSURANCE 

dirigibles  or  other  aircraft,  whether  stationary  or  being 
operated  under  their  own  power,  which  shall  include  all 
or  any  of  the  hazards  of  fire,  explosion,  transportation, 
collision,  loss  by  legal  liability  for  damage  to  property 
resulting  from  the  maintenance  and  use  of  automobiles  and 
airplanes,  seaplanes,  dirigibles  or  other  aircraft,  and  loss 
by  burglary  or  theft,  vandalism  or  malicious  mischief, 
or  the  wrongful  conversion,  disposal  or  concealment  of 
automobiles,  whether  held  under  conditional  sale  contract 
or  subject  to  chattel  mortgages  or  any  one  or  more  of 
such  hazards  but  shall  not  include  insurance  against  loss 
by  reason  of  bodily  injury  to  the  person." 

Underwriters  Agencies.  These  are  organizations  backed  by 
one  or  more  stock  companies  and  operate  the  same  as  the 
parent  institution.  They  serve  the  purpose  of  feeders,  ena- 
bling the  parent  company  to  obtain  agents  who  would  other- 
wise not  be  available. 

Mutual  Companies,  Reciprocals  and  Inter-Insurance  Asso- 
ciations. Such  organizations  are  of  four  general  classes 
which,  for  convenience,  may  be  denominated  (1)  Deposit 
Premium  Mutuals,  (2)  Ordinary  Premium  Mutuals,  (3) 
Inter-insurance  Associations,  and  (4)   Reciprocals. 

Deposit  Premium  Mutuals.  Policies  in  such  organizations 
are  usually  issued  for  a  comparatively  large  premium  esti- 
mated to  be  in  excess  of  that  necessary  to  cover  normal  losses 
and  expenses.  A  portion  of  such  premium  at  the  end  of  a 
stated  period  is  returned  to  the  policyholder  in  the  shape  of 
dividends,  thus  making  the  cost  of  this  form  of  insurance 
the  difference  between  the  deposit  premium  (plus  loss  of  in- 
terest thereon)  and  the  dividend.  Policies  of  this  character 
are  assessable  in  case  the  losses  and  expenses  exceed  the 
receipts,  although  as  a  rule  no  assessments  are  necessary  be- 
cause of  the  large  deposit  premium  advanced. 

Ordinary  Premium  Mutuals.  Policies  in  such  organizations 
are  usually  issued  for  a  cash  premium,  based  either  on  stock 
company  rates  or  on  some  percentage  thereof,  which  are 
estimated  to  be  sufficient  to  pay  all  losses  and  expenses. 
Some  such  companies  return  in  the  form  of  dividends,  or 
credits  on  renewal  policies,  any  excess  of  income  over  outgo ; 
others  place  the  excess  in  a  surplus  fund.  Quite  frequently 
agency  plants  are  maintained,  commissions  paid  for  business 
secured,  and  operations  conducted  in  much  the  same  manner 


FIRE    INSURANCE  7 

as  by  the  stock  companies.  Policyholders  are  assessable  for 
losses  and  expenses  in  excess  of  income.  Some  States  are 
now  requiring  companies  of  this  type  to  set  aside  a  portion 
of  the  premiums  as  a  reserve  fund.  The  same  remarks 
regarding  liability  of  policyholders  apply  to  this  form  of 
indemnity  as  to  that  of  Inter-insurance  Associations. 

Inter-insurance  Associations.  These  are  operated  under 
various  plans;  some,  such  as  the  small  farm  associations,  have 
practically  no  expense,  and  issue  policies  for  a  nominal  fee, 
levying  assessments  on  the  policyholders  to  pay  such  losses 
and  incidental  expenses  as  may  occur.  Some  issue  policies 
for  a  small  cash  premium  designed  to  cover  expenses  and 
trifling  losses,  and  in  addition  require  premium  notes  on 
which  payments  are  demanded  to  cover  losses  and  expenses 
occurring  in  excess  of  those  covered  by  the  cash  premiums. 
Others  operate  in  a  similar  way  without  requiring  premium 
notes,  merely  levying  assessments  as  necessary. 

Companies  of  this  type  are  not  usually  required  to  have  any 
capital,    surj^lus   or   reserve   fund.      The    indemnity   offered 

thereby  depends  necessarily  on  the  solvency 
Policyholders'  of  the  various  policyholders  and  as  each 
Liability  one  is  usually  liable  for  all  debts  of  the 

association,  policies  therein  not  only  con- 
stitute self  insurance,  but  also,  in  effect,  make  the  holder  the 
endorser  of  each  other  policyholder's  ability  to  pay  such 
assessments  as  may  be  levied.  In  effect,  the  acceptance  of  a 
policy  is  like  endorsing  a  note  of  unknown  parties,  for  an 
unknown  amount,  payable  on  demand.  In  some  States  it  has 
been  held  that  trustees  or  agents  of  others  may  not  accept 
fire  insurance  policies  that  are  assessable,  on  the  theory  that 
they  have  no  right  to  bind  their  principals  to  a  transaction 
that  will  make  them  liable  to  unknown  persons  for  unknown 
debts  of  unlimited  amounts. 

Reciprocals.  These  are  sometimes  called  inter-insurance 
exchanges  and  while  mutual  in  their  character  are  unin- 
corporated and,  in  this  respect,  differ  from  the  so-called 
''mutuals."  They  also  differ  from  ''Lloyds,"  in  that  the 
latter  do  business  Tvith  the  public;  whereas  these  ''ex- 
changes" grant  insurance  only  to  their  subscribers,  each 
of  whom  is  thus  both  insurer  and  insured.  Usually  these 
organizations  are  operated  by  an  attorney-in-fact,  who,  in 
such  capaeit}^,  acts-  as  the  agent  of  each  of  the  subscribers 
and  has  power  to  bind  them  as  insurance  carriers  within  the 


8  THE  AGENTS  KEY  TO  FIRE  INSURANCE  1 

limit  of  his  authority  as  fixed  by  the  power  of  attorney  | 
from  the  subscriber  to  him.  In  these  organizations  each  i 
subscriber  assumes  a  proportionate  amount  of  the  liability  | 
issued  and  bears  his  share  of  the  losses  and  expenses,  being  | 
liable  pro  rata  for  assessment  if  the  funds  in  the  hands  '^ 
of  the  attorney-in-fact  are  insufficient.  Some  American  \ 
courts  have  held  organizations  of  this  kind  to  be,  in  effect,  j 
copartnerships.  By  statutory  provision  or  in  accordance  i 
with  the  powers  of  attorney,  service  made  upon  the  attorney-  I 
in-fact  is  in  most  States  equivalent  to  service  on  each  one! 
of  the  subscribers,  no  matter  if  non-resident.  Except  that  3 
each  subscriber  is  liable  only  for  his  pro  rata  share  of  losses  \. 
and  expenses  the  remarks  regarding  policyholders '  liability  | 

apply  to  reciprocals. 

\ 
Non-Assessable  Mutuals.  There  are  a  few  companies  which,  ; 
while  mutual  in  form,  do  business  on  the  cash  plan,  issue  J 
only  non-assessable  policies,  and  operate  generally  in  the  ^ 
same  manner  as  do  stock  companies.  Policies  in  such  com- ^ 
panics  are,  as  a  rule,  protected  by  the  assets  only,  since  there  f. 
is  no  assessable  liability.  i 

Lloyds  Groups  or  Associations.  These  are  organizations  of  { 
individuals  known  as  subscribers  or  underwriters,  each  usu- j 
ally  assuming  liability  for  a  given  proportion  of  each  policy  ■;. 
issued.  In  some  cases  the  liability  is  limited  and  in  others  i 
unlimited.  The  policies  are  issued  for  a  cash  premium  and  | 
are  not  assessable.  ^ 

Two  features  may  be  stated  in  connection  with  this  form  ' 
of  insurance  which  are  worthy  of  consideration : — First,  the  j 
difficulty  of  knowing  the  financial  strength  of  each  subscriber  j 
or  underwriter;  second,  if  a  loss  occurs  and  suit  to  recover  i 
becomes  necessary,  each  individual  subscriber  or  underwriter  ^ 
must  be  sued  for  his  share  of  the  loss,  thus  entailing  much  J 
trouble  and  expense. 


Senior  Mutuals.  This  is  the  name  commonly  used  to  desig-  ] 
nate  a  group  of  Mutual  companies  associated  together  for  J 
the  purpose  of  writing  insurance  on  high  grade  properties! 
equipped  with  automatic  sprinklers.  They  make  their  own^ 
standards  of  construction  and  protection,  issue  policy  con-| 
tracts  under  separate  forms,  and  operate  independently  in  .^ 
every  way,  subject  to  such  regulations  as  may  be  imposed  ^ 
upon  them  in  those  States  which  they  enter.  ;; 


FIRE   INSURANCE  \) 

Policyholders  are  required  to  pay  a  deposit  premium,  which 
is  usually  much  in  excess  of  that  produced  by  stock  company 
rates,  and  dividends  to  policyholders  are  de- 
Method  of  clared  out  of  earnings.  These  dividends  vary 
Operation  with  the  different  companies  forming  the  group, 
and  as  an  average  reduce  the  cost  of  insurance 
to  a  low  figure.  These  companies  depend  on  careful  selection, 
rigid  standards  and  excellent  inspection  service  to  produce  a 
low  fire  cost,  and  have  been  very  successful  in  operation. 

Policies  in  the  Senior  Mutuals  are  assessable  and  the  cost 
of  such  insurance  can  never  be  definitely  known  in  advance. 
In  determining  the  premium  cost  to  the  policyholder  interest 
on  the  deposit  premium  advanced  must  be  taken  into  account. 
The  Senior  Mutuals  deal  directly  with  the  insured  and  pay 
no  commission  to  agents  or  brokers. 

Junior  Mutuals.  This  is  a  group  of  Mutual  companies  simi- 
lar to  the  Senior  Mutuals  in  operation,  but  with  somewhat 
less  rigid  standards  of  selection,  construction,  protection  and 
inspection,  and  with  a  less  favorable  loss  and  dividend-paying 
record. 


CHAPTER  II 

THE  AGENT 

His  Authority — Limitations — Waivers  —  Responsi- 
bility —  His  Work  —  Solicitation — Middleman — 
— Duty  to  Client — Duty  to  Company — Agent's 
Own  Property — Re-insurance  by  Agent. 

The  great  bulk  of  fire  insurance  in  the  United  States  is 
written  by  and  through  local  agents  in  the  various  cities  and 

towns,  of  whom  there  are  estimated  to  be 
Authority        150,000,  each  agent  representing  one  or  more 

companies,  and  this  method  of  transacting  the 
business  has  become  known  as  the  American  Agency  System. 
In  many  other  countries  the  insured  deals  direct  with  the 
company,  and  while  that  is  the  practice  here  to  some  extent, 
the  volume  of  business  so  transacted  is  negligible  in  pro- 
portion to  the  whole.  A  very  considerable  percentage  of 
business  is  done  through  brokers  (see  Brokers). 

The  local  agent  is  authorized  to  rejpresent  the  company  in 
his  city  or  town  and  vicinity;  to  issue  and  countersign  its 
policies  and  collect  the  premiums  therefor,  and  in  general  to 
act  locally  for  the  company  in  all  matters  pertaining  to  the 
acceptance  or  declination  of  lines  of  insurance,  and  the  issu- 
ance or  cancellation  of  binders  and  of  policy  contracts  cov- 
ering the  various  classes  of  insurable  property.  Customarily 
he  does  not  adjust  losses  except  when  requested  or  authorized 
by  the  company  to  do  so. 

Almost  every  one  of  the  48  States  require  that  an  agent 
shall  be  licensed  as  such  by  the  State  as  well  as  authorized 
by  the  company  before  he  can  transact  a  fire  insurance 
business,  and  many  States  attempt  to  enforce  laws  or  rulings 
which  require  an  agent  to  possess  certain  qualifications  be- 
fore he  can  be  licensed.  In  general  these  are  that  he  be 
trustworthy  and  competent,  be  regularly  in  the  fire  in- 
surance business,  and  able  to  show  at  least  elementary  knowl- 
edge of  the  policy  contract  and  the  various  clauses  and  riders 
that  may  be  attached  thereto. 

10 


THE   AGENT  11 

The  powers  conferred  are  broad  within  their  field  and  such 
limitations  as  are  placed  thereon  are  usually  conveyed  in  a 
letter  of  instructions  sent  at  the  time  of  ap- 
Limitations  pointment,  covering  the  general  subjects  of 
line  limits,  prohibited  risks,  etc.,  and  supple- 
mented from  time  to  time  by  more  specific  advices  from  the 
company  or  its  general.  State  or  special  agents.  The  com- 
pany is  bound  by  any  act  of  the  agent,  within  the  scope  of 
his  general  authority  as  its  local  representative,  regardless  of 
these  limitations  unless  they  are  known  to  the  policyholder, 
but  as  between  the  agent  and  the  company  a  violation  of  such 
limitations  renders  the  agent  personally  liable  to  the  com- 
pany for  resulting  damages.  To  illustrate,  suppose  the  agent 
is  instructed  not  to  exceed  a  line  of  $5,000  on  any  one  risk 
and  he  issues  a  policy  for  $7,500.  If  the  company  accepts 
the  over-line  then  the  agent  is  relieved  of  liability.  But 
suppose  the  property  to  burn  before  there  has  been  oppor- 
tunity to  accept  or  decline  it:  In  that  case  the  company 
must  pay  the  $7,500  loss,  but  it  has  a  legal  claim  on  the  agent 
for  the  $2,500  in  excess  of  the  limitation  fixed  in  its  instruc- 
tions. 

Although  the  policy  contains  a  provision  that  no  agent 
shall  have  power  to  waive  any  provision  or  condition  thereof, 

nor  grant  any  privilege  or  permission  affecting 
Waiver  the  insurance,  unless  written  upon  or  attached 

to  the  policy,  the  courts  have  almost  uniformly 
held  that  an  oral  agreement  between  insured  and  agent  may 
waive  any  provision  or  condition  of  the  policy,  and,  similarly, 
may  give  permission  for  something  that  would  otherwise 
void  the  policy  (see  Waiver  and  Estoppel  by  Agent).  The 
companies  have  very  rarely  held  the  agent  personally  liable 
for  such  oral  waivers,  but  if  the  agent  were  to  waive  some- 
thing which  ran  counter  to  his  instructions  he  could  un- 
doubtedly be  held  personally  liable  for  damages  resulting  be- 
cause of  his  act. 

It  will  be  seen,  therefore,  that  while  the  agent's  authority 
is  very  broad,  it  entails  a  large  measure  of  responsibility,  not 

only  for  the  company's  welfare  but  also  for 
Responsibility  his  own  pocket.     The  confidence  reposed  by 

the  company  in  its  agent  extends  far  beyond 
the  writing  of  policies  and  remitting  premiums,  for  in  addi- 
tion to  the  foregoing  the  selection  of  business  is  to  a  large 
extent  in  his  hands,  and  upon  his  knowledge  of  men  and 
conditions,  and  his  good  judgment,  depend  in  great  measure 


12  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

the  profit  to  the  company  which  is  the  desideratum  for  his 
continuance  as  agent.  While  physical  conditions  are  to  a 
considerable  extent  cared  for  by  rates  and  by  inspection  at 
the  hands  of  field  men  and  inspection  bureaus,  the  compa- 
nies depend  in  great  measure  on  the  local  agent  as  regards  the 
moral  hazard.  He  has  avenues  of  information  about  men  and 
conditions  in  his  own  town  and  vicinity  that  are  not  open 
to  the  company  or  its  supervising  representatives  and  the 
local  agent  is  the  only  one  in  many  cases  who  is  in  positior 
to  determine  those  worthj?^  of  confidence. 

The  first  and  most  important  work  of  the  local  agent  is  the 
solicitation  and  obtaining  of  business.     Just  how  this  is  to 

be  accomplished  rests  largely  with  the  individual, 
His  Work     but  there  are  a  few  general  suggestions  which 

may  prove  helpful. 

First  of  all,  the  agent  should  understand  what  he  is  selling 
and  should,  therefore,  familiarize  himself  with  the  conditions 

of  the  policy  contract  and  of  the  clauses  in 
Solicitation      common   use,    and    be    able    to    explain    them 

clearly  and  simply.  Almost  all  insurance  busi- 
ness is  obtained  by  personal  solicitation — very  little  comes 
in  any  other  way.  Advertising  and  letter  writing  are  good 
merely  to  supplement  personal  work.  Usually  the  new  agent 
begins  by  soliciting  the  smaller  business,  such  as  dwellings, 
household  furniture,  mercantile  buildings  and  stocks,  churches, 
schools,  public  buildings  and  the  smaller  special  hazards. 
Such  risks,  so  far  as  numbers  go,  compose  the  great  bulk  of 
the  insurance  business  and  can  usually  be  obtained  more 
easily  than  the  larger  risks.  Indeed,  they  constitute  the  back- 
bone of  most  agencies  and  once  obtained  are  more  readily 
held  and  renewed,  year  after  year,  than  the  larger  business 
for  which,  risk  by  risk,  there  is  naturally  greater  competition. 
It  is  a  common  saying  that  an  agency  controlling  a  large 
volume  of  small  business  is  more  of  an  asset  than  one  where 
a  few  large  risks  make  up  the  bulk  of  the  premiums. 

There  are  no  set  rules  for  soliciting,  but  the  following  sug- 
gestions are  merely  setting  down  a  portion  of  the  work  which 
a  trained  solicitor  does: 

Take  advantage  of  any  occurrence  which  may  bring  about 
the  necessity  for  new  or  additional  fire  insurance,  such  as  the 

erection  of  new  structures,  the  remodeling  of  a 
Possibilities     building  or  the  enlargement  of  a  plant.    A  man 

about  to  marry  may  desire  household  furniture 
insurance;  merchants  often  require  additional  insurance  dur- 


THE   AGENT  13 

ing  Christmas  and  Easter  seasons;  those  using  cold  storage 
plants  require  insurance  on  contents  almost  daily  during  the 
busy  season;  and  so  the  list  may  be  continued. 

Learn  the  rates  of  premium  applying  on  any  property  be- 
fore soliciting  insurance  thereon  and  if  possible  make  up  the 
form  of  cover  that  will  be  used.    If  the  risk  is 
Rates  and        specifically  rated,  get  a  copy  of  the  *' make-up" 
Forms  of  the  rate  and  see  if  any  charges  can  be  re- 

moved by  improvements  or  corrections,  thus 
bringing  the  rate  down;  if  not  rated  under  schedule,  go  over 
the  property  carefully  with  a  copy  of  the  schedule  that  will 
be  used  in  making  a  rate  and  see  if  its  application  will  pro- 
duce a  lower  rate  than  the  one  applying  on  the  risk.  The 
rate  is  largely  what  counts  in  obtaining  business;  money 
talks,  and  a  reduction  in  rate  is  a  better  solicitor  than  friend- 
ship or  pull.  Examine  the  forms  under  which  insurance  is 
placed  and  see  if  they  can  be  changed  to  advantage;  ascer- 
tain whether  the  insured  is  properly  covered  and  all  neces- 
sary'- clauses  and  permits  are  on  each  policy  and  whether  the 
insurance  is  all  concurrent;  if  property  is  rated  under  co- 
insurance conditions  and  insured  at  flat  rates,  talk  coinsur- 
ance rates,  and  if  at  80%  coinsurance  rates,  see  if  the  reduc- 
tion for  the  use  of  100%  clause  will  prove  attractive.  Always 
make  a  note  of  the  expiration  of  existing  insurance  and 
keep  it  tabulated  so  you  can  solicit  the  lines  a  month  or  so 
before  they  expire. 

Cultivate  architects  and  builders  who  may  give  valuable 
pointers;  loaning  institutions,  lawyers  and  real  estate  men 
often  place  insurance  and  may  be  made  valua- 
Service  ble  clients ;  there  are  many  avenues  for  obtain- 

ing insurance  besides  the  direct  solicitation  of 
the  owner.  If  no  fire  insurance  is  wanted,  try  for  a  tornado 
or  hail  policy,  or  one  on  rents,  or  use  and  occupancy.  Per- 
haps the  key-note  of  success  in  soliciting  is  preparedness,  that 
is,  the  submission  of  a  concrete  proposition  to  insure,  giving 
the  form  of  cover  and  the  cost :  Nothing  else  will  so  quickly 
give  the  impression  to  the  insured  that  the  agent  knows  his 
business  and  is  thorough,  reliable  and  able  to  give  helpful 
service,  not  only  in  arranging  for  insurance  under  adequate 
forms  at  the  lowest  rates  obtainable  from  reputable  com- 
panies, but  also  in  sound  advice  and  assistance  in  case  a  loss 
occurs.  A  reputation  for  intelligent  and  reliable  service  once 
established  is  a  most  valuable  asset. 


14  THE  AGENTS  KEY  TO  FIRE  INSURANCE 

The  local  agent  acts  as  a  middleman  between  the  company 
on  the  one  hand  and  the  insured  on  the  other  and  in  turn 

is  the  representative  of  each.  The  query  is 
Middleman      often  propounded:    **Is  the  local  agent's  first 

obligation  to  his  client  or  his  company?"  Why 
to  one  more  than  the  other  ?  His  obligation  is  to  his  client  in 
the  things  he  is  doing  for  his  client  and  to  the  company  in 
the  things  he  is  doing  for  it.  Thus  his  work  and  duties  are 
naturally  divided  into  two  branches: — 

To  coordinate  information  of  all  kinds  respecting  the  prop- 
erty to  be  covered;  to  draw  policy  forms  and  examine  poli- 
cies written,  to  see  that  they  give  adequate 
Duty  to  coverage  and  the  necessary  and  desirable  privi- 

Client  leges  and  are  free  from  non-concurrence;  to 

dissect  insurance  rates,  advise  regarding  im- 
provements, and  secure  the  lowest  rates  obtainable  from 
reputable  companies  for  the  kind  of  indemnity  required;  to 
assist  the  insured  in  case  of  loss  and  to  advise  with  him  on 
all  insurance  matters. 

To  report  promptly  all  business  binding  or  written,  with  all 
necessary  and  material  information;  to  learn  and  follow  the 

underwriting  practices  of  each  company  repre- 
Duty  to  sented ;  to  comply  with  general  or  specific  in- 

Company  structions  and  particularly  to  cancel  policies 

promptly  when  requested;  to  answer  corre- 
spondence within  reasonable  time;  to  collect  premiums  and 
remit  balances  within  the  time  agreed  upon;  to  report  losses 
as  soon  as  possible  after  the  fire,  with  information  as  to  the 
property  covered  and  the  estimated  amount  of  loss  thereon, 
the  cause  of  fire  and  all  material  information  obtainable: 
In  short,  to  act  truly  as  the  local  representative  of  the  com- 
pany, responsible  for  the  conduct  of  its  affairs.  The  reputa- 
tion of  a  company  in  a  given  locality  is  to  a  large  degree  that 
of  its  local  agent. 

An  agent  cannot  make  a  valid  contract  with  himself,  hence, 
if  he  desires  to  insure  his  own  property  the  assent  of  his 

company  should  be  obtained  to  make  such 
Agent's  transaction  binding.    This  may  be  done  by  an 

Own  exchange  of  letters,  or  by  sending  a  policy, 

Property  duly  made  out,  for  approval  or  countersigning 

by  an  official  of  the  Company. 


THE   AGENT  16 

An  agent  cannot  legally  bind  or  issue  the  policy  of  one  of 

his  companies  as  reinsurance  of  another  company  which  he 

also  represents,  for  the  reason  that  the  agent 

Reinsurance     cannot  act  in  matters  of  discretion  for  the  two 

by  Agent  parties  in  the  same  transaction. 

The  New  York  Court  of  Appeals,  in  Empire 
State  Insurance  Co.  vs.  American  Central  Insurance  Co., 
states  this  principle  of  law  as  follows,  in  part : — *  *  The  same 
person  may  sometimes  act  as  agent  for  the  two  parties  in  the 
same  transaction,  but  he  can  do  so  only  in  case  he  has  no 
discretion  to  exercise  for  either  party."  Where  he  is  vested 
with  discretion,  as  an  insurance  agent  is,  and  acts  for  both 
companies,  he  occupies  "an  antagonistic  position,  and  there 
would  be  a  conflict  of  interests.  Contracts  thus  negotiated 
are  void  at  the  option  of  any  non-assenting  party  thereto.  It 
matters  not  that  the  agent  has  acted  fairly  and  honestly, 
and  that  neither  party  to  the  contract  has  suffered  injury." 

The  agent  may  have  an  understanding  with  his  companies 
whereby  each  agrees  in  advance  to  ratify  reinsurance  of — 
or  hj — anj'  other  of  his  companies,  but  otherwise  each  such 
reinsurance  must  be  dub"  ratified  to  make  it  valid. 

Sometimes  when  an  agency  is  terminated  the  certificate 
of  authority  issued  to  such  agency  by  the  company  cannot 
be  found.  In  such  case  it  is  customary  to  have  executed 
a  certificate  of  which  the  following  is  an  illustration: 

"Certificate  of  Loss  of  Agency  Commission 

' '  Agency  at 19 

**This    is    to    certify    that    the    Commission    issued   by 

Insurance   Company   to 

as  its  Agent 

for and  vicinity 

has  been  lost  or  destroyed  and  cannot  be  produced,  and 
that  we  hereby  release  the  said  Insurance  Company  from 
all  liability  under  said  Commission,  which  we  acknowledge 
to  be  no  longer  of  any  force  or  effect,  and  we  agree  to 
return  it  to  the  Company  should  it  be  found. 

Agent. ' ' 


CHAPTER  III 
THE  BROKER 

Local — General — Solicitors. 

The  fire  insurance  broker  as  such  does  not  represent  any 
company  and  is  considered  to  be  the  representative  and 
agent  o£  the  insured,  though  it  has  been  held  in  some  courts 
that  he  is  the  agent  of  the  company  in  so  far  as  the  collec- 
tion of  the  premium  is  concerned.  The  broker  is  a  free- 
lance in  soliciting  and  in  placing  business,  being  confined 
neither  to  any  given  territory  in  obtaining  business  nor  to 
any  given  company  in  placing  his  business.  Brokers  may  be 
divided  into  two  classes,  local  and  general. 

Local  Brokers.  The  local  broker  confines  his  soliciting 
mostly  to  his  own  town  and  vicinity,  and  many  cities  have 
brokers  of  this  type  who  are  much  the  same  as  solicitors, 
except  that  they  do  not  place  all  their  business  through  one 
agency. 

G-eneral  Brokers.  The  general  broker  does  not  confine 
himself  to  any  one  locality  but  seeks  business  wherever  he  can, 
especially  the  accounts  of  large  concerns,  and  is  the  type  of 
broker  to  which  the  remarks  that  follow  chiefly  apply.  He 
frequently  deals  direct  with  the  company  at  its  head  or 
branch  offices,  in  which  case  the  application  for  the  business 
there  bound  is  usually  sent  to  the  local  agent  where  the 
property  covered  is  situated,  for  him  to  issue  a  policy  in 
accordance  with  local  rates  and  rules,  the  policy  being  re- 
turned to  the  company  for  delivery  to  the  broker  and  the 
collection  of  the  premium.  The  commission  paid  the  broker, 
usually  termed  the  brokerage,  is  less  than  the  agent's  com- 
mission, and  the  agent  receives  what  is  termed  an  overriding 
(sometimes  called  overwriting)  commission  for  issuing  the 
policy  and  giving  the  company  information  about  the  risk 
covered. 

16 


THE    BROKER  17 

The  broker  occupies  a  useful  and  necessary  place,  particu- 
larly in  financial  centres  where  large  concerns  have  their 

headquarters.  Such  concerns  frequently  have 
Service  of  property  in  many  localities  and  States,  with 
Broker  separate  rating  organizations,  differing  rules  in 

regard  to  forms  and  clauses,  and  the  privi- 
leges that  maj^  be  granted,  so  that  if  such  concerns  were  to 
attempt  to  handle  their  fire  business  through  the  local  agents 
in  the  places  where  their  various  properties  are  situated,  it 
would  often  be  necessary  to  employ  the  services  of  an  expert 
to  look  after  that  work  alone.  The  broker's  service  elimi- 
nates this  necessity  and  consequent  expense,  and  in  addition 
furnishes  a  similarity  of  forms  and  cover,  and  a  coordination 
of  all  insurance,  that  would  be  difficult  to  obtain  when  deal- 
ing with  many  agents  instead  of  one  broker.  Then,  too,  the 
local  agent  is  often  unknown  to  the  headquarters  officials; 
business  would  necessarily  be  transacted  largely  by  corre- 
spondence; whereas,  if  something  arises  of  an  unusual  nature 
or  requiring  the  services  of  an  expert,  the  broker  is  available 
on  short  notice  for  a  personal  interview.  Another  important 
thing  is  that  frequently  additional  insurance  is  needed,  or  a 
privilege  is  necessary,  or  some  change  occurs  which  renders 
the  insurance  void  unless  endorsed.  It  would  sometimes  be 
impossible  to  have  this  bound  at  once  when  dealing  through 
local  agents  in  several  distant  States,  but  the  broker  can 
usually  protect  his  client  by  securing  binders  within  an  hour 
or  two  of  receiving  the  order. 

On  the  other  hand,  it  may  be  pointed  out  that  there  are 
certain  advantages  in  dealing  with  the  local  agent  where  it 

is  possible,  for  he  often  is  influential  in  local 
Agent  vs.  matters  and  can  aid  in  securing  for  his  client 

Broker  from  the  local  authorities  those  privileges  and 

accommodations  that  are  frequently  needed  by 
a  large  concern.  The  business  enterprise  which  consistently 
endeavors  to  win  local  sentiment  and  friendliness  is  apt  to 
have,  thereby,  greater  success  in  handling  its  labor  prob- 
lems and  its  necessities  for  municipal  service;  it  has  a  power- 
ful advocate  in  the  local  agent,  who  is  usually  a  representa- 
tive man  in  his  locality.  Recognizing  this  fact,  the  insured, 
though  he  feels  it  necessary  to  have  the  services  of  a  broker, 
frequently  directs  that  the  insurance  shall  be  placed  through 
pertain  designated  local  agents  and  the  commissions  divided. 


18  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

For  business  that  is  controlled  where  it  is  located,  the  local 
man  should  be  in  position  to  give  equal  or  better  service  than 
an  outsider;  but  the  local  agent,  if  he  is  to  give  such  service, 
needs  to  have  the  same  familiarity  as  the  broker  with  rates, 
schedules,  rules  and  forms,  and  maintain  the  same  equipment 
for  handling  all  questions  that  may  arise.  If  he  is  so  equip- 
ped, he  has  then  the  advantage  which  always  lies  with  the 
man  on  the  ground. 

Solicitors.  The  solicitor  usually  is  connected  with  an  agent 
or  broker  and  is  compensated  either  by  salary  or  commission. 
In  either  case  the  business  he  obtains  is  usually  handled  by 
his  principal,  except  for  the  delivery  of  the  policy  and  the 
collection  of  the  premium. 


CHAPTER  IV 

INSURANCE  ORGANIZATIONS 
(AGENTS  AND  STOCK  COMPANIES) 

Co-operation  Efforts — Engineering — Technical — 
Underwriting — Rating — Inspecting — Adjusting — 
Social — Educational. 

In  a  business  so  extensive  as  fire  insurance,  it  is  natural 
that  there  should  be  many  organizations  and  associations 
with  various  objects  in  view  and  these  are  briefly  reviewed. 

National  Association  of  Local  Agents.  Local  agents  main- 
tain this  organization  and  in  most  States  a  State  Association 
with  the  object  of  exchanging  information  of  mutual  interest, 
keeping  watch  on  the  legislation  introduced,  securing  uni- 
formity of  practice  in  those  things  susceptible  to  such  treat- 
ment and  for  such  other  objects  as  may  promote  their  mutual 
welfare.  It  was  through  the  efforts  of  the  National  and 
State  Associations  that  the  uniform  monthly  account  and 
the  uniform  daily  report  blank  have  been  adopted;  also  an 
agreement  on  the  part  of  most  companies  not  to  write  '  *  over- 
head"— that  is  not  to  write  business  in  a  given  territory 
except  through  the  local  agent  commissioned  therefor. 

Insurance  Federations.  Agents  are  also  largely  interested 
in  the  Insurance  Federation  of  America  which  numbers  in 
its  ranks  both  fire  and  casualty  insurance  agents  and  many 
fire  and  casualty  companies.  There  are  also  many  State 
Federations  with  similar  membership.  The  object  of  the 
Insurance  Federation  is  to  promote  healthy  conditions  in 
insurance  in  each  of  the  States  and  to  oppose  legislation 
inimical  to  the  interests  of  its  membership,  particularly  that 
which  contemplates  that  the  State  itself  sell  or  otherwise 
provide  indemnity  for  loss. 

Local  Boards.  In  many  of  the  cities,  towns  and  counties 
local  agents  representing  stock  fire  insurance  companies 
maintain  local  Boards  a  few  of  which  have  rate  making 
powers  and  are  supported  by  assessments  on  premiums  writ- 
ten.    Most  of  such  Boards  are  maintained  by  the  agents 

19 


20  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

themselves  for  the  purpose  of  establishing  local  practices, 
such  as  the  amount  of  brokerage  payable  and  various  other 
agreements  intended  for  the  benefit  of  the  members. 

National  Board   of  Fire   Underwriters.     Of   the   several 
organizations  maintained  by  stock  fire  insurance  companies 
tliis  is  one  of  the  most  important  in  character 
General  of  work  and  universality  of  membership,  which 

Character  comprises  nearly  all  the  stock  fire  insurance 
companies  transacting  any  considerable  amount 
of  business.  It  has  no  supervision  over  rates,  commissions 
or  agents,  nor  any  direct  authority  over  the  business  in 
general,  but  confines  its  activities  in  an  advisory  capacity 
to  legal,  technical,  engineering  and  statistical  features  of 
the  fire  insurance  business. 

It  promulgates  standards  for  public  and  private  fire 
department  organizations,  for  the  protection  of  buildings  and 

their  parts  from  fire  and  for  the  installation 
Building  and  of  machinery  whose  operation  has  inherent  or 
Protection  incidental  fire  hazard.  It  also  promulgates  and 
Standards        endeavors  to  secure  the  adoption  of  improved 

building  codes  and  of  ordinances  designed  for 
the  greater  safety  from  fire  hazard.  Its  work  inures  to  the 
benefit  of  the  public  as  well  as  to  insurance  companies  be- 
cause of  its  active  and  intelligent  efforts  towards  fire 
prevention. 

Its  engineering  department  makes  surveys  of  American 
cities  to  determine  the  character  of  the  fire  hazard  as   a 

whole  and  of  the  protection  available,  con- 
Engineering  suiting  with  the  city  authorities  in  all  matters 
Reports  relating  thereto.     Its  reports  go  into  a  great 

deal  of  detail  covering  water  supply,  fire  de- 
partment, fire  alarm,  building  and  structural  conditions  and 
important  occupancies. 

For  immediate  use  in  case  of  a  conflagration,  it  maintains 
an  equipment  consisting  of  a  detailed  working  method  for 

handling  losses  on  a  large  scale  and  a  cabinet 
Losses  and  containing  all  the  cards,  indexes,  folders  and 
Arbitration      other  blanks  necessary  for  the  organization  of 

a  central  ofi&ce  and  a  general  loss  committee. 
It  also  stands  ready  through  its  committee  on  adjustments 
to  act  as  arbitrator  in  case  of  dispute  among  companies 
regarding  their  liability  as  reinsurers,  or  in  apportionments 
of  non-concurrent  insurance. 


INSURANCE    ORGANIZATIONS  21  ] 

Arson  It  also  maintains  an  Arson  Bureau  wliose  ac-  ! 

tivities  are  directed  against  incendiaries.  \ 

Through  its   committee  on  laws  and  its  general  counsel,  i 

it  keeps  in  touch  with  the  constantly  changing  statutes  and  ; 

the  great   amount  of  proposed  legislation  in 

Laws  the  various  States  and  endeavors  to  interpret  ^ 

the  State  laws  and  the  rulings  and  regulations  i 

of  the  various  insurance  departments  to  its  membership.  i 

i 

In  1917  the  National  Board  adopted  a  standard  classifica-  I 

tion  of  454  classes,  which  were  later  condensed  to  151,  and  i 

formed    the    Actuarial    Bureau    which    con-  ^ 

Actuarial  tains  in  its  membership  most  of  the  stock  com-  ; 

Bureau  panies    and   many   of   the   mutual    companies  ! 

operating  in  the  United  States.     This  Bureau  i 

tabulates  all  of  the  writings,  premiums   and  losses  of  the  ! 

members,    each    of    whom   furnishes   it    annually    with    the  j 

amount  of  liability  written   and  the  premium  received  on  i 

each  class  in  each  State  of  the  United  States  and  a  report  • 

regarding  each  loss  that  occurs.     A  further  feature  of  the  ' 

Bureau  is  the  special  recording  of  each  loss  that  is  reported  i 

to  have  been  fraudulent  or  of  incendiary  origin.  j 

Underwriters'  Laboratories,  Incorporated.     This  was  es-  \ 

tablished  in  1893  by  the  stock  fire  insurance  companies.    Its  ■ 

main  office  and  laboratory  is  in  Chicago  and  is  said  to  be  i 

one  of  the  few  standard  fireproof  buildings  in  the  world.  ; 
In  this  plant  careful  and  exacting  tests  are  made  of  various 

materials  and  devices  directly  or  indirectly  associated  with  j 

building   construction   and   equipment,   fire   protection,   pre-  • 

vention   and   extinction.     If   found   to   fulfill   the   standard  i 

requirements  of  the  Underwriters  Laboratories  it  issues  a  < 

formal  approval  of  the  device  or  material,  which  then  be-  ! 
comes  accepted  and  approved  by  all  the  underwriting  organ- 
izations where  recognition  is  called  for  by  rating  schedules 

or  other  rules.  ■ 

i 

Among  the  things  so  tested  are  sprinkler  heads,  gasoline  \ 
and  acetylene  lighting  systems,  fire  extinguishers,  hose,  ; 
pumps  and  many  other  articles  whose  use  and  operation  ■ 
have  to  do  with  fire  hazards  or  prevention.  The  organiza-  ' 
tion  is  now  supported  almost  entirely  by  fees  received  from 
manufacturers  whose  devices  and  inventions  are  tested,  busi- 
ness men  having  found     that  the  approval  of  the  Labora-  < 


32  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

tories  is  of  sufficient  value  for  selling  purposes  to  warrant 
the  moderate  costs  involved. 

In  practice  it  has  been  found  that  mere  formal  approval  of 
an  article  submitted  is  not  sufficient  for  the  needs  of  manu- 
facturers, the  public  and  others,  since  the  goods  when  placed 
on  the  market  may  not  be  up  to  standard.  Therefore,  a 
label  service  is  maintained  by  which,  under  certain  specified 
conditions  of  inspection  and  supervision,  manufacturers  are 
authorized  for  a  small  fee  to  attach  the  Underwriters'  label 
to  their  goods,  this  carrying  with  it  in  effect  the  warranty 
by  the  Laboratories  that  the  article  is  up  to  the  required 
standard.  Final  action  on  the  merit  or  demerit  of  a  given 
article  submitted  for  test  by  the  Laboratories  is  taken  upon 
the  authority  of  an  advisory  council,  of  which  one  member 
is  a  representative  of  the  Bureau  of  Standards  of  the  United 
States  Government,  which  acts  as  a  court  of  last  resort  in 
case  a  decision  is  questioned. 

National  Fire  Protection  Association.  This  is  an  organiza- 
tion numbering  in  its  membership  both  stock  and  mutual  fire 
insurance  companies  and  "more  than  one  hundred  national 
associations  and  business  organizations  covering  nearly  the 
entire  field  of  commercial  activity.  Its  objects  are  to  pro- 
mote and  improve  fire  protection  and  prevention  methods, 
draft  standards  for  construction  of  buildings,  for  the  manu- 
facture and  installation  of  machinery  and  equipment  and  for 
all  the  various  kinds  of  protective  and  fire  fighting  apparatus 
and  devices.  This  organization  initiates  many  of  the  stand- 
ards later  adopted  by  the  National  Board  of  Fire  Under- 
writers and  other  organizations. 

The  Eastern  Union.  This  is  a  voluntary  association  of 
stock  fire  insurance  companies  having  for  its  purpose,  where 
lawfully  permitted,  the  securing  of  uniformity  in  methods 
of  rate  making,  forms  of  policies,  compensation  to  agents 
and  the  conserving  of  good  practices  in  general.  The 
membership  comprises  over  one  hundred  companies  which 
write  about  75%  of  the  total  amount  of  agency  fire  premiums 
in  the  New  England,  Middle  and  such  of  the  Southern  States 
as  are  embraced  in  its  field  of  operations. 

Western  Union  and  Western  Insurance  Bureau.  These 
two  organizations  have  functions  in  the  Central  and  Western 
States  similar  to  those  of  the  Eastern  Union. 


INSURANCE    ORGANIZATIONS  23 

The  Rocky  Mountain  and  Pacific  States  also  have  associa- 
tions which  regulate  commissions  and  make  rates  where  they 
are  not  in  the  hands  of  independent  rating  bureaus. 

UlSTDERWRITINa  ASSOCIATIONS 

There  are  a  number  of  associations  having  a  stock  com- 
pany membership  which  underwrite  for  their  members  cer- 
tain specified  classes  of  business  and  maintain  their  own 
offices  and  salaried  employees.  The  members  share  in  the 
business  equally  up  to  an  agreed  maximum,  or  upon  a  fixed 
percentage  of  all  lines  written,  and  likewise  in  the  expenses 
and  losses  sustained.  Such  associations  include  the  follow- 
ing: 

Factory  Insurance  Association.  This  is  a  group  of  stock 
fire  insurance  companies  associated  together  under  one  man- 
agement, with  its  office  in  Hartford,  Conn.,  for  the  purpose 
of  competing  with  the  Senior  and  Junior  Mutuals  on  the 
same  class  of  business  written,  namely,  high  grade  sprink- 
lered  risks. 

The  F.  I.  A.  carefully  selects  its  risks,  imposes  standards 
of  construction  and  protection  that  compare  with  those  of 
the  Mutuals,  but  as  a  rule  are  less  onerous  for 
Method  of  the  insured,  and  give  an  excellent  inspection 
Operation  service  that  is  one  of  the  most  valuable  fea- 
tures of  its  work  and  a  great  advantage  to  the 
insured  as  an  aid  in  preserving  property  from  destruction  by 
fire. 

This  association  issues  policies  on  the  standard  form  pre- 
scribed by  the  State  where  the  property  insured  is  located, 
and  adjusts  its  own  losses.  Its  rates  of  premium  are  about 
the  same  as  the  net  cost  of  insurance  in  the  Mutuals.  It 
deals  with  the  insured  through  the  medium  of  such  agent  or 
broker  as  the  insured  may  designate  and  pays  a  commission 
on  the  premiums  of  all  policies  issued,  either  new  or  re- 
newals. Protection  may  be  obtained  against  loss  by  fire,  by 
sprinkler  leakage  and  by  tornado,  and  in  some  cases  against 
loss  of  Use  and  Occupancy. 

The  advantage  of  dealing  through  the  Factory  Insurance 
Association  is  that  policies  are  in  the  standard  form  and, 
therefore,  non-assessable.  The  premium  cost  is  known  in 
advance  and  is  about  the  same  net  cost  as  for  insurance  in 


24  THE  AGENTS   KEY  TO  FIRE  INSURANCE     /  ] 

i 

the  Mutuals,  and  does  not  depend  on  dividends;  in  other     | 
words,  is  not  affected  if  the  fire  cost  in  any  one  year  is 
excessive.  i 

Western  Factory  Insurance  Association;  Western  Sprin-     I 
klered  Risk  Association;  Underwriters'  Service  Association,    j 

These  three  organizations  have  their  headquarters  in  Chi-     j 
cago,  operate  in  the  Central  and  Western  States  and  are     ■ 
similar   in  organization,  purpose   and  method  of   operation 
to  the  F.  I.  A.    The  last  named  is  authorized  to  write  other 
classes  of  business,  but  has  not  done  so  to  any  large  extent.     ; 

Cotton  Insurance   Association.     Cotton  is  the  most  im-  \ 

portant  product  in  the  Southern  States  and  the  class  calls  ' 

for  such  specialized  underwriting  that  in  1905  a  number  of  ; 
the    companies    formed   the    Cotton    Insurance   Association, 

which  writes  cotton  in  storage,  in  compresses,  in  transit,  etc.,  : 

for  its  members.    It  is  able  to  give  cover  and  service  to  large  ' 

cotton  factors   that  it  would  not  be  possible  for  any  one  , 

company  to  give  if  it  handled  the  business  independently.  \ 

Cotton  Fire  &  Marine  Association.    This  was  organized  in 
1919  for  a  similar  purpose  as  the  C.  I.  A.,  the  two  being     \ 
competing  organizations. 

Underwriters'  Grain  Association.  This  organization  was  ■ 
formed  during  the  war,  when  companies  were  called  upon  ' 
to  furnish  very  large  amounts  of  insurance  on  grain  in  j 
elevators  and  were  asked  to  do  everything  in  their  power  j 
to  reduce  fire  hazards  and  increase  the  protection  in  terminal  i 
elevators,  in  order  that  the  great  quantities  of  very  necessary  I 
foodstuffs  should  be  preserved  from  destruction.  Inspection 
and  supervision  of  elevators  by  this  organization  and  the 
convenience  found  by  grain  handlers  in  dealing  with  one 
source  regarding  insurance  matters  has  had  the  effect  of 
continuing  the  Association  in  existence.  Agents  and  brokers 
are  paid  a  commission  on  such  business  as  thev  place  through 
the  U.  G.  A. 

Oil  Insurance  Association.  This  organization  was  formed 
in  1918  for  the  purpose  of  handling  certain  oil  business  for 
the  companies  which  it  represents  as  an  underwriting  and 
reinsurance  medium.  Its  headquarters  are  in  Chicago  in 
charge  of  a  salaried  manager.  Its  work  involves  the  in- 
spection, supervision  and  underwriting  of  oil  refineries  and 
tank  storage  of  crude  and  refined  oil  and  its  products,  espe- 


INSURANCE   ORGANIZATIONS  25 

cially  in  certain  of  the  southwestern  states.  It  deals  through 
agents  and  brokers  with  the  various  oil  interests  and  arranges 
for  the  issuance  of  one  policy  covering  an  entire  schedule 
in  one  of  the  companies  for  which  it  acts,  placing  the  neces- 
sary reinsurance  with  the  other  companies  represented.  Any 
policies  written  are  always  in  the  standard  form  prescribed 
in  the  state  where  property  insured  is  located  and  issued 
through  the  accredited  local  agent  of  the  company  whose 
policy  is  placed  in  the  hands  of  the  insured.  It  uses  the 
standard  forms  and  the  rates  that  are  made  by  the  recog- 
nized rating  bodies,  paying  a  commission  to  agents  on  all 
policies  issued  whether  new  or  renewals.  Protection  may 
be  obtained  against  loss  by  fire,  lightning  and  tornado, 
including  use  and  occupancy  cover. 

Railroad  Syndicates.  Steam  railroad  properties  have  been 
written  for  many  years  by  syndicates  or  groups  of  fire  in- 
surance companies,  onq  in  the  east  and  one  in  the  west, 
being  handled  on  much  the  same  plan  as  the  Oil  Insurance 
Association. 

VARIOUS  OTHER  ORGANIZATIONS 

There  are  a  number  of  organizations  either  operated  in 
connection  with  rate  making  bodies,  or  independently,  which 
have  certain  definite  functions  to  perform  that  have  a  useful 
purpose  in  the  fire  underwriting  world. 

Central  Traction  &  Lighting  Bureau.  This  is  an  organiza- 
tion of  stock  companies  which  is  not  a  rate  making  or  under- 
writing body,  but  has  for  its  functions  the  recommending 
of  rating  schedules  and  standards  of  construction  and  pro- 
tection for  street  railway  properties  and  electric  light  and 
power  plants. 

Inspection  Bureaus.  There  are  three  inspection  bureaus 
maintained  by  stock  companies  in  the  New  England  and 
Middle  States,  one  in  Texas  and  one  on  the  Pacific  Coast. 
These  Bureaus  make  periodical  inspections  of  sprinklered 
and  unsprinklered  special  hazards  in  their  various  fields  and 
furnish  surveys,  diagrams  and  other  reports  to  the  member 
companies. 

Electrical  Inspections.  Although  many  municipalities  at- 
tempt to  inspect  and  regulate  electrical  wiring  and  apparatus 
in  use,  it  has  been  found  to  be  an  advantage  in  many  sections 


26  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

of  the  United  States  for  fire  insurance  companies  to  main- 
tain special  bureaus,  or  departments  under  the  supervision 
of  rating  organizations,  with  the  object  of  inspecting  all  the 
electrical  installations.  Where  these  are  found  to  be  in 
accordance  with  the  National  Electric  Code  a  certificate  is 
issued  to  the  property  owner  on  the  payment  of  a  small 
fee.  In  localities  where  this  is  done  no  permit  to  use  elec- 
tricity is  given  on  insurance  policies  except  with  the  pro- 
vision that  such  a  certificate  has  been  issued.  In  many  cases 
an  understanding  exists  between  the  underwriters  and  the 
electric  light  and  power  companies  that  the  current  will  not 
be  turned  on  until  the  installation  has  been  approved.  The 
National  Electrical  Code  has  become  the  accepted  standard 
and  being  so  recognized  fixtures,  devices  and  all  articles  in- 
tended for  electrical  installations  are  available  everywhere, 
so  that  the  electrical  problem  has  become  greatly  simplified. 

Reinsurance.  The  majority  of  companies  for  many  years 
confined  their  lines  largely  to  the  amounts  they  could  retain 
for  their  own  account  and  these  varied  from  $1,500  to  $5,000 
or  more  according  to  class.  With  the  increased  efficiency 
of  fire  protection,  the  growth  and  concentration  of  values 
and  the  larger  assets  of  the  fire  insurance  companies,  not 
only  have  retained  lines  become  greater,  but  also  the  practice 
has  developed  of  accepting  gross  lines  much  in  excess  of 
the  amount  to  be  retained,  the  surplus  being  reinsured. 

The  need  of  reinsurance  facilities,  combined  with  the  desire 
not  to  lose  the  benefits  of  the  surplus  amounts  given  off, 
led  to  the  formation,  in  1911,  of  the  Reinsurance  Bureau 
for  the  purpose  of  exchanging  reinsurances.  Each  member 
company  may  cede  thereto  an  amount  equal  to  its  own  re- 
tention on  any  class  of  risk  except  where  located  in  certain 
defined  congested  areas  of  cities  and  each  member  shares 
upon  a  stipulated  percentage  in  the  total  premiums  received 
and  in  the  expenses  and  losses  incurred. 

The  Reinsurance  Clearing  House  was  later  formed  and 
operates  in  much  the  same  way  as  the  Bureau. 

Almost  all  fire  insurance  companies  have  what  are  known 
as  ^* reinsurance  treaty  contracts"  under  which  the  rein- 
suring company  is  obliged  to  accept  any  risk  ceded  to  it 
under  the  terms  of  the  treaty.  There  are  a  few  American 
reinsurance  companies  and  some  direct  writing  stock  com- 
panies that  make  treaty  reinsurance  contracts,  but  the  bulk 
of  such  business  is  in  the  hands  of  foreign  companies. 


INSURANCE    ORGANIZATIONS  27 

Adjustment  Bureaus.  It  became  evident  some  years  ago 
that  a  method  of  adjusting  losses  must  be  found  which  would 
be  less  expensive  and  cumbersome  than  by  having  each  of 
the  several  companies  interested  in  a  single  loss  represented 
by  a  separate  adjuster.  This  led  to  the  formation  in  1905 
of  the  General  Adjustment  Bureau,  and  later  of  four  other 
bureaus,  the  five  now  maintaining  some  sixty  offices  scattered 
over  the  United  States  and  a  large  corps  of  trained  adjusters 
and  other  employees.  These  bureaus,  while  under  the  direc- 
tion of  certain  of  the  stock  fire  insurance  companies,  will 
adjust  losses  for  non-members  as  well  as  for  members. 

Salvage  Corps.  An  important  co-operative  effort  of  the 
stock  fire  insurance  companies  is  the  maintenance  in  many  of 
the  larger  cities  of  salvage  corps,  sometimes  called  *'fire 
patrols"  or  ** protective  departments."  These  organisations 
have  certain  rights  recognized  by  the  various  cities  in  which 
they  operate  and  their  duty  is  to  protect  property  at  the  time 
of  fire  and  so  far  as  possible  to  reduce  the  damage  especially 
from  water. 

KINDRED    ASSOCIATIONS 

There  are  a  number  of  organizations  maintained  in  con- 
nection with  the  many  other  classes  of  business  that  fire  in- 
surance companies  write  besides  that  which  is  usually  termed 
regular  fire  insurance.  Such  associations  have  for  their 
purpose  the  standardizing  of  forms  of  policies  and  their 
conditions,  rates  of  premiums,  commissions  or  brokerage 
payable,  and  other  rules  and  practices  that  are  for  the  com- 
mon interest. 

Aircraft.  The  National  Aircraft  Underwriters '  Association 
assumes  jurisdiction  over  this   class  for  the  entire  United 

States. 

Automobile.  The  following  organizations  have  territorial 
jurisdiction  as  indicated  by  their  names:  National  Auto- 
mobile Underwriters '  Conference,  Eastern  Automobile  Under- 
writers'  Conference,  New  England  Automobile  Underwriters' 
Conference,  Southern  Automobile  Underwriters'  Conference, 
Western  Automobile  Underwriters'  Conference,  and  the 
Pacific  Coast  Automobile  Underwriters'  Conference. 

Explosion,  Riot  and  Civil  Commotion.  The  Explosion  Con- 
ference with  headquarters  in  New  York  and  the  Western 


28  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

Explosion  Conference  with  headquarters  in  Chicago,  between 
them  have  jurisdiction  over  the  entire  United  States. 

Hail.  The  Western  Hail  and  Adjustment  Association  op- 
erates in  the  Central  and  Western  States,  where  practically- 
all  of  the  hail  business  is  done  and  the  Pacific  Coast  Hail 
Association  supervises  the  small  amount  of  business  written 
in  that  territory. 

Mail  Package  and  Tourist  Floater.  Both  of  these  classes 
come  under  the  supervision  of  the  Tourist  Floater  Insurance 
Conference  for  all  the  United  States. 

Registered  Mail.  There  are  several  groups  of  companies 
formed  for  the  purpose  of  sharing  the  liability,  premiums, 
losses  and  expenses  on  registered  mail  business  upon  an 
agreed  percentage,  which  attempt  to  regulate  the  practices 
relating  to  this  class  of  insurance. 

Sprinkler  Leakage.  This  class  is  under  the  jurisdiction  of 
the  Sprinkler  Leakage  Conference  and  the  Western  Sprinkler 
Leakage  Conference  respectively. 

Water  Damage.  The  Water  Damage  Conference  has  juris- 
diction for  the  entire  United  States. 

Windstorm  or  Tornado.  The  Eastern  Tornado  Associa- 
tion has  supervision  over  the  New  England  and  Middle 
States  and  the  Southern  Tornado  Association  over  the 
Southern  States.  The  Western  Union  and  Western  Insurance 
Bureau  look  after  the  Central  and  Western  States  and 
similar  associations  supervise  the  class  in  the  Rocky  Moun- 
tain and  Pacific  Coast  States. 

Social  and  Educational  Organizations.  There  are  many 
societies,  associations  or  clubs  that  were  formed  with  the 
thought  of  proving  a  benefit  to  the  business  from  an  edu- 
cational or  social  standpoint.  Membership  in  such  organiza- 
tions is  individual  rather  than  a  company  membership. 
Among  such  may  be  mentioned  the  Insurance  Library  Asso- 
ciation of  Boston,  which  maintains  the  most  comprehensive 
library  on  fire  insurance  in  the  United  States;  the  Insurance 
Society  of  New  York,  which  was  the  first  organization  of  the 
kind  in  this  country,  there  being  seventeen  similar  societies 
now  in  existence;  and  the  Insurance  Institute  of  America, 
which  conducts  classes  in  insurance  each  year  in  various 
insurance   centers.     There   are  numerous  local   associations 


INSURANCE    ORGANIZATIONS  29 

of  fieldmen,  such  as  the  Fire  Underwriters'  Association  of 
the  Northwest,  the  Smoke  &  Cinder  Club  of  Pittsburgh  and 
others.  One  of  the  interesting  national  organizations  that 
is  social  in  character  is  known  as  the  ^'Ancient  &  Honorable 
Order  of  the  Blue  Goose,"  with  local  *' ponds,"  in  many 
of  the  States,  membership  being  open  to  officers  of  the  com- 
panies, general  agents  and  fieldmen,  independent  fire  insur- 
ance adjusters,  members  of  the  editorial  staffs  of  insurance 
publications  and  officials  of  various  organizations  to  which 
insurance  companies  are  subscribers.  Most  of  the  organiza- 
tions grouped  under  this  heading  do  not  attempt  any  juris- 
diction over  agents,  rates,  compensation,  or  any  other  under- 
writing questions,  but  are  of  value  in  bringing  insurance  men 
together  for  the  exchange  of  information  and  the  promotion 
of  good  fellowship. 


CHAPTER  V 

GENERAL  OFFICE  WORK 

Supplies — Lost  Policy  Vouchers — Daily  Reports — 
Binders — Monthly  Accounts — Agent's  Commis- 
sions— Collection  of  Premiums  and  Payment  of 
Balances — Office  Records— Correspondence — In- 
structions— Reporting   Losses — Keeping   Records. 

Each  company  supplies  the  agent  with  blank  policies ;  daily 
reports  and  a  register  for  his  own  use;  blanks  for  reporting 

losses;  requisition  blanks  for  ordering  supplies 
Supplies  and  forms  for  use  in  writing  policies,  unless 

these  are  furnished  by  some  central  body. 
Various  other  supplies  are  usually  available  and  the  com- 
pany's requisition  blank  will  indicate  their  nature.  Rates 
and  rules  will  be  furnished  the  agent  in  accordance  with  prac- 
tices followed  in  his  locality,  together  with  the  necessary  ex- 
planation for  their  use.  The  company  will  also  furnish  the 
agent  with  instructions  regarding  its  underwriting  practices, 
with  restrictions,  if  any,  as  to  classes  he  must  avoid  and  the 
lines  (that  is,  amount  of  policy)  he  may  write  on  a  single 
risk,  or  in  a  block,  or  on  given  classes  of  business. 

Policies  are  furnished  in  blank  by  each  company  and  are 
usually  numbered  in  print  consecutively  and  should  be  used 

in  numerical  order.  The  printed  number  of  a 
Policies  policy    should    never    be    changed.      Policies 

spoiled  in  writing  should  not  be  destroyed  but 
instead  should  be  returned  to  the  company.  The  agent  is 
charged  with  each  blank  policy  furnished  to  him  and  is 
expected  to  account  for  each  by  returning  it  or  reporting  its 
issuance.  If  a  blank  policy  is  lost  the  fact  should  be  re- 
ported to  the  company,  when  its  own  particular  form  of 
voucher  executed  by  the  agent  will  usually  be  required. 

Lost  Policy  Voucher  (Agent).  Where  agent  has  lost  a 
blank  policy  the  following  form  of  voucher  may  be  used  if 
the  company  does  not  furnish  one: 

30 


GENERAL   OFFICE    WORK                                    31  ! 

Agency   19 I 

residing  in i 

County  of  State  of being  first  duly  sworn 

upon  oath  depose . .  and  say.,  that  ..he.,  (is)  (are)  Agent.,  j 

of  the Insurance  Co.,  for and  < 

vicinity :  that  . .  he . .  received  from  the  said  Insurance  Com- 
pany certain  blank  Insurance  Policies  of  said  Company,  num-  : 

bered for  use  in Agency.    That  : 

Insurance  Folic,   numbered  ha.,  been  mislaid  j 

or  lost  and  cannot  be  found;  that  said  Folic,  ha.,  never  i 
been  issued  by or  by  or  with privity,  knowl- 
edge or  consent,  to  any  person,  persons  or  corporation,  and  { 
that  said  Folic,  (is)  (are)  null  and  void,  and  whenever  j 
found  will  be  returned  to  said  Insurance  Company.  j 
Subscribed  and  sworn  to  before  me,  ■ 
this day  of 19 (L.  S.)  > 

Agent  "'' 

Notary  Fublic. 

! 

The  voucher  should  be  signed  and  sworn  to  by  the  agent  | 

personally,  or  if  the  agency  is  a  partnership  by  one  of  the  1 

partners  signing  for  the  partnership  as  follows:    ''John  R.  ' 

Doe  &  Co.,  by  Richard  Roe,  a  member  of  the  firm".    Or  if  ) 

a  corporation  by  one  of  the  officers — preferably  the  one  ac-  ■ 

customed  to  signing  policies.  \ 

j 

Some  companies  will  accept  a  voucher  in  the  following  j 

form:  I 

Agency  at 19 . .  | 

I  Hereby  Certify  that  Folicy  No Renewal  No.  = 

of  the Insurance  Company,  j 

received  by  me  as  Agent  of  said  Company,  has  never  been  I 

issued  to  any  person  or  party  whatsoever,  but  has  been  lost  'j 

or  mislaid,  and  that  there  is  no  liability  whatever  on  the  part  j 

of  said  Company  thereunder; — that   I  have  made   diligent  ; 

search  therefor  without  success,  and  I  agree  to  return  same  ■ 
to  said  Company  at  once,  if  found. 

Agent.  ; 


33  THE  AGENTS   KEY   TO   FIRE   INSURANCE  ; 

Lost  Policy  Voucher  (Insured).    The  following  form  may 
be  used  as  a  voucher  when  the  insured  has  lost  or  mislaid  his     \ 
policy.     The  return  premium,  if  any,  is  figured  pro  rata  if 
the  policy  is  to  be  re-written  or  short  rate  if  the  policy  is  to     ' 
be  cancelled: 

'*  Agency  at 19 . . .      ■ 

This  is  to  Certify,  that  Policy  No and  covering     \ 

$ on situate   i 

has  been  lost  or  destroyed  and  cannot  be  produced,  and  in 

consideration  of  a  return  premium  of  $ receipt  of  l 

which  is  hereby  acknowledged,  the  said  Insurance  Company  ; 

is  hereby  released  from  all  liability  under  said  policy,  which  j 

is  declared  null  and  void  and  no  longer  of  any  force  or  effect.  ; 
Witness  to  Signature 


Insured. 


The  insured  will  usually  wish  a  new  policy  in  place  of  the 
one  lost.  This  may  be  issued  for  a  full  term  and  the  unearned 
premium  on  the  one  lost  credited  on  the  premium  of  the  new 
policy,  or  a  new  policy  may  be  issued  for  the  remainder  of 
the  term  of  the  one  lost,  filling  in  as  follows  the  space  on  the 
policy  where  premium  is  usually  inserted: 

''The  cancellation  and  surrender  of  Policy  No 

and  of  $ '^  (insert  amount  of  unearned  premium  on 

lost  policy). 

The  unearned  premium  stated  on  the  lost  policy  voucher 
and  the  premium  stated  on  the  policy  replacing  the  one  lost 
should  be  identical. 


REPORTING  BUSINESS  WRITTEN. 

It  is  necessary  that  a  complete  and  accurate  copy  of  the 
written  portions  of  the  policy  be  sent  to  the  company  on 
blank  furnished  for  that  purpose,  called  the 
Daily  daily  report.    The  information  furnished  there- 

Report  on  will  include  the  following:     Name  of  in- 

sured   as    entered    on    policy;    amount,    rate, 
premium,  commencement,  term,  and  expiration,  and  a  copy  in 


GENERAL    OFFICE    WORK  33 

full  of  the  form.  The  daily  report,  in  addition  to  being  an 
accurate  record  of  the  policy,  calls  for  certain  information  re- 
specting the  insured  and  the  property  covered.  Sometimes  it 
is  not  necessary  to  give  the  information  provided  for  by 
specific  questions  thereon:  for  example,  no  diagram  is  neces- 
sary if  the  insurance  map  shows  risk  and  exposures  accu- 
ratel}^  The  company  or  its  special  agent  will  advise  with  the 
agent  respecting  this  part  of  his  work  and  tell  him  what  is 
necessary  or  required.  But  it  is  important  that  no  material 
information  be  withheld,  and  if  there  is  anything  unusual 
about  the  risk,  known  to  the  agent  or  indicated  by  title,  rate, 
term,  amount,  form,  map,  or  exposures,  a  suitable  explanation 
should  be  made  to  the  company  on  the  daily  report  or  in  a 
letter.  This  will  save  both  agent  and  company  much  corre- 
spondence. For  illustration  the  upper  half  of  a  sample  daily 
report  follows: 


U  risk  thown  on  Fin 

DAILY   REPORT     AGFNa  Rochafltar,  H.   Y.       Frt..n      .. 

RI<wk.N»         R-\^. 

H?gMgrN. 

STREET: 

784692 

N«m> 

Nn 

F-Vamnl**  In^iirjmpp  f^.r»mniin\/   rtt  M««...   \/^   i_ 

cw    I  urK. 

TWa  SPACE  FOB  HOME  OFFHX  USE  Ora.Y 


Amount  $_ 

_60Q0^. 

- 

Pate        .60                               PrPmium  $  2,Q. 00 

Thirty   and   OO/lOO                                                                                      Dollarx  Premium 

Assured 

far  thit  iermnf        thras   vearB 

from  the^ 

34th 

day    of               Jantiary                     IffLI                at    nnnn 

totht 

S4th 

day  of             3maaX7                  /.«0              at  nnon 

AMOCMT  INSUSED 

Piva 

ThomBand  and  00/100                                                     n„//^. 

'                                                          ■  ■'^'""j- 

Give  F«ll  C«»r  of  Writln  tmiMm  •(  Politr 


34  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

The  agent  should  notify  the  company  without  delay  when- 
ever he  binds  insurance  on  a  risk  to  take  effect  at  once  or 

prior  to  the  time  when  the  daily  report  would 
Binders  in  the  ordinary  course  of  business  reach  the 

company's  office.  Such  notice  of  insurance 
binding  may  be  in  the  form  of  a  letter  or  a  printed  slip  such 
as  the  following: 

Insurance  Company. 

INSURANCE  IS  BOUND  AS  FOLLOWS : 


In  the  name  of 

Amount,  $ ,  dating  from 191 

Covering  on 

Situate 

for months,  at  rate  of 

Coinsurance  clause  attached. 


Agent. 

The  agent  may  bind  insurance  orally,  but  if  this  is  done  he 
should  confirm  it  in  writing.  Where  one  agent  represents  a 
number  of  companies,  he  should,  as  soon  as  he  binds  insur- 
ance, designate  the  companies  by  name  together  with  the 
amount  for  which  each  company  is  bound.  On  one  occasion 
an  agent  bound  some  insurance  by  telephone  about  12:15 
P.  M.  and  then  went  home  to  luncheon  without  having  made 
any  notation  or  deciding  in  his  own  mind  as  to  the  companies 
in  which  he  intended  to  bind  the  line.  Before  he  returned  fire 
had  destroyed  the  risk.  The  agent  represented  twenty  com- 
panies and  he  found  himself  in  a  very  embarrassing  position, 
as  may  readily  be  imagined. 

At  the  end  of  each  month,  the  agent  should  make  up  and 
send  to  the  company  a  monthly  account,  on  blank  furnished 

for  the  purpose,  showing  in  numerical  order 
Monthly  the  policies  issued  during  the  month  with  the 

Accounts  premiums    thereon,    together    with    additional 

premiums  for  endorsements  made  during  the 
month;  also  showing  any  policies  cancelled  during  the  month 


GENERAL   OFFICE    WORK 


35 


with  the  return  premiums  therefor,  together  with  the  return 
premiums  for  endorsements  made  during  the  month;  also 
the  amount  of  agent's  commissions  on  the  net  premiums. 
These  items,  with  any  charges  or  credits  that  have  occurred 
during  the  month,  such  as  a  charge  for  map  or  map  correc- 
tions, constitute  the  agent's  monthly  balance,  which  is  to  be 
paid  in  amount  as  rendered. 

The  making  out  and  forwarding  of  the  monthly  account 
should  not  be  delayed  awaiting  collections;  the  company 
needs  the  account  promptly  in  order  to  close  its  books.  Can- 
celled and  spoiled  policies  should  not  be  held  until  account 
is  made  up,  but  should  be  forwarded  to  the  company  as  soon 
as  possible. 

For  illustration,  a  copy  of  a  monthly  account  properly 
made  out  is  appended. 


(Official  Blank  of  National  Association  of  Insurance  Agents.) 
JOHN  R.  HORNER.  AGENT  AT  PLEASANT  VALLEY,  PA. 

In  Account  With 

EXAMPLE  INSURANCE  COMPANY 

Month  op  January,  1920 


Gross  Premiums 

Expiration    I 

For 

N  limber 

Amount 
Insured 

Term 
(in 

Home  Offi 

Use 

15% 

20% 

25% 

years) 

Mo. 

Yr. 

Class 

124967 

4000 

20 

00 

3 

1 

23 

968 

2000 

8 

00 

3 

1 

23 

969 

3000 

18 

00 

1 

1 

21 

970 

1000 

15 

00 

1 

1 

21 

971 

Spoiled 

972 

20000 

180 

00 

1 

1 

21 

, 

973 

5000 

40 

00 

5 

26 

974 

9000 

63 

90 

X 

6 

20 

975 

500 

2 

50 

1 

1 

21 

^otal 

Total  Gr« 

'remiums.. 

258 

90 

58 

00 

30 

50 

347 

40 

Premiums 

Icarr.  for.  ( 

Petal 

fTotal  Groj 
iCommissio 

^mmisa'oi 

18    

38 

84 

11 

60 

7 

62 

58 

06 

Icarr.  for.  ( 

36 


THE  AGENTS   KEY  TO   FIRE   INSURANCE 


OFFICIAI 

BLANK 

(Continued) 

Amount 
Can- 
celled 

Return  Premiums 

For  Home  Office  Use 

Number 

15% 

20% 

25% 

Term 

(in 
years) 

Com. 

Exp. 

Original 
Premium 

Clf 

Mo. 

Yr. 

Mo. 

Yr 

124942 
948 
953 

4000 
1500 

35 

35 
5 

62 
00 

62 
34 

— 



4 
4 

20 
20 
05 

39 

82 

Return 
Premiums 

/Total  Return  Premiums 
\entered  below  (2) 

Return 
Commissions 

6 

39 

(Total  Return  Commis- 
\sions  entered  below  (4) 

SUMMARY  FOR  THE  MONTH  OF  JANUARY,  1920 


(To  be  filled  out  by  Company) 
Total    Gross    Writings 
brought  forward $ 

Total    Gross    Writings 
cancelled $ $ 


Re-insured $ $. 

Net  Writings $. 


(1)  Total  Gross  Premiums      (To  be  filled  out  by  Agent) 
brought    forward    from 
other  side $347  40 

(2)  Less  Return  Premiums 

as  above $ $ 

Re-insurance. ...  $ $  39  82 


Net  Premiums $307  58 

(If  return  premiums  in  excess 
extend  in  red  ink) 


(3)  Total  Gross  Commis- 
sions    $51 

(4)  Total  Return  Commis- 
sions   _$j 

Net  Commission  due  Agent  $5 
(If  return  commission  in  ex( 

extend  in  red  ink) 


(1)  Total  Gross  Premiums  brought  for- 
ward from  other  side 

$347 
6 

40 
39 

(2)  Total  Return  Premiums  as  above . 

(3)  Total  Commission  on  Gross  Pre- 
miums from  other  side 

$39 

58 

20 

Local  Board  Expenses  when  authorized 

by  Company  (vouchers  herewith) . . . 

Postage  when  authorized  by  Company 

Re-insurance  effected  by  agents  (per 

1 

Loss  124269 

32 

Remittance  herewith 

Balance  (if  any)  due  Agent 

203 

Total 

Total 

$353 

79 

$353 

Agency  at. 


GENERAL   OFFICE   WORK  37 

The  agent  receives  his  compensation  in  the  fomi  of  a  com- 
mission which  is  calculated  on  net  premiums  written,  i.  e., 

premiums  and  additional  premiums,  less  return 
Agents'  premiums   for   cancellations   or   reductions   in 

Commissions    rate.     Return   commission  is   credited   to   the 

company  in  the  same  percentage  as  was 
charged  on  the  original  premium.  The  insured  pays  the 
original  premium  in  full  and  in  case  of  cancellation  or  re- 
duction in  rate  is  entitled  to  the  full  amount  of  the  unearned 
premium  without  deduction  for  agent's  commission  or  for 
brokerage.  Some  of  the  larger  agencies  run  what  they  call 
a  return  commission  sinking  fund;  that  is,  they  credit  said 
fund  with  a  given  percentage  of  all  commissions,  say  10%, 
and  then  charge  the  fund  with  all  return  commissions  in 
full.  The  object  of  this  is  to  provide  a  steady  commission 
income,  for  with  some  agencies  there  are  seasons  of  the 
year  when  large  amounts  of  insurance  are  written  under 
annual  policies  which  are  cancelled  after  running  a  few 
months,  and  without  the  plan  outlined  there  would  be  some 
months  when  the  return  commissions  on  business  cancelled 
would  amount  to  nearly  as  much  as  the  commissions  on  busi- 
ness written  during  such  time. 

It  is  important  to  remember  that  a  commission  is  not 
earned  until  the  premium  on  the  policy  is  collected,  nor  is 

the  transaction  complete  until  the  company  is 
Collection  paid  its  premium.  There  is  unfortunately  no 
and  time  within  which  it  is  the  universal  custom 

Payment  to  require  payment  of  premiums  on  the  part 

of  the  insured,  though  there  are  a  number  of 
localities  where  it  is  the  rule  to  cancel  policies  if  they  are 
not  paid  for  within  forty-five  days.  There  is  no  good  reason 
for  extending  undue  credit  and  it  is  often  remarked  that 
since  the  insured  is  always  anxious  to  have  any  loss  that 
occurs  paid  promptly,  he  ought  to  be  willing  to  pay  the 
premium  promptly.  The  companies  as  a  rule  require  bal- 
ances to  be  paid  within  a  stipulated  time  whether  the  agent 
has  made  collection  or  not,  and  this  is  necessary  for  the  safe 
conduct  of  the  business  and  on  the  whole  results  beneficially 
to  the  agent.  It  necessitates  his  putting  some  capital  into 
his  business  but  on  the  other  hand  is  a  check  against  undue 
credit.  Many  agents  will  not  deliver  small  premium  policies 
until  they  are  paid  for,  since  the  cost  of  running  after  little 
premiums  often  amounts  to  more  than  the  ^commission  in- 
j^olved. 


38  THE  AGENTS  KEY  TO  FIRE  INSURANCE  ' 

A  very  interesting  method   of   collecting   insurance  pre-  I 

miums  has  been  adopted  with  success  by  agents  in  certain  ] 

localities,    being    an    adaptation    to    the    fire  ; 

Trade  insurance  business  of  the  Trade  Acceptance,  j 

Acceptance       so  familiar  in  commercial  lines.     The  way  in  j 

which  the  plan  is  carried  out  is  as  follows:  j 

When   policies    are    forwarded    to    the   insured    they   are  j 

accompanied  by  a  statement  of  the  premiums  involved.     If  ' 

these  remain  unpaid  at  the  end  of  thirty  days,  or  there-  i 

abouts,  the  insured  is  asked  for  a  check  and  if  further  time  | 

is  desired  he  is  requested  to  discharge  the  account  by  pay-  ; 

ment  of  a  portion  thereof  in  cash  and  the  giving  of  a  Trade  : 

Acceptance  for  the  balance.     The  cash  payment  is  to  cover  | 

earned   premiums   up    to    the   maturity   of   the   acceptance,  : 

which  is  made  for  thirty,  sixty,  or  ninety  days,  or  such  other  ; 

period  of  time  as  may  be  agreed  upon.  j 

The  Trade  Acceptance  has  attached  to  it  a  statement  of  i 

the  premiums  covered  thereby,  this  statement  giving  each  j 

policy   number,   amount   and  premium  for   the  purpose   of  ' 

identification  in   case   of   cancellation,  return  premium,   or  \ 

other  subsequent  transaction.  ] 

When  the  cash  payment  and  Trade  Acceptance  is  in  hand 

the  insured  is  given  a  receipted  bill  for  the  premiums  in-  ] 

volved,  which  closes  the  agent's  ledger  account,  the  accept-  ' 

ance   being   deposited   in   bank   which   makes   collection   in  ; 

the  ordinary  course  of  business.  ! 

If   the   Acceptance   bears   a   longer   maturity   than   sixty  I 

days  from  the  inception  of  the  insurance  it  usually  bears  , 

interest  at  the  legal  rate.  \ 

One  form  of  Trade  Acceptance  used  by  a  prominent  Balti-  ; 

more  agency  is  as  follows:  i 

No.  19....         $....  ; 

after  date  pay  to  the  order  of  Ourselves , 

Dollars  with  interest | 

The  obligation   of   the   acceptor  hereof   is   for  premiums  ; 

on  insurance  policies,  per  invoice  dated 19 ; 

Value  received  and  charge  the  same  to  account  of  Acceptor,  'i 

In  consideration  of  the  payment  or  assumption  of  pay-  j 

ment  by  the  payee  hereof,  to  the  respective  insurance  com-  ; 

panics  of  the  premiums  for  which  this  trade  acceptance  is  I 


GENERAL    OFFICE    WORK  39 

given,  the  acceptor  hereby  assigns  to  the  payee  any  unearned 
premium  to  which  he  may  become  entitled  under  said  policy 
or  policies  as  hereinafter  provided.  In  the  event  of  the 
insolvency  or  bankruptcy  of  the  acceptor  or  the  appoint- 
ment of  receivers  for  his,  their  or  its  property,  prior  to  the 
due  date  hereof,  the  amount  hereof  shall  at  once  become 
due  and  payable  to  the  payee,  and  if  not  immediately  paid 
upon  demand,  or  if  not  paid  on  its  due  date,  the  acceptor 
agrees  for  himself,  themselves,  or  itself,  his  personal  repre- 
sentatives, successors  or  assigns,  to  immediately  surrender 
all  said  policies  to  the  payee  to  the  end  that  the  payee 
may,  for  the  account  of  the  acceptor,  surrender  all  said 
policies  to  the  Companies  and  receive  the  return  premium 
thereon  and  credit  the  same  against  the  amount  of  this 
acceptance.  And  said  acceptor  agrees  that  pending  the 
payment  of  this  acceptance  or  the  surrender  of  said  policies 
he,  they  or  it,  will  not  do  or  permit  anything  to  be  done 
to  said  insurance  policies  contrary  to  this  agreement. 

Across  the  face  of  above  form  the  following  inscription  is 
printed  in  red  ink: 

*' ACCEPTED 

Date    

Payable  at 

Location  of  bank , 

Signature '  ^ 

It  is  an  excellent  plan  to  keep  a  separate  bank  account  in 
which  to  deposit  all  premiums  collected,  and  from  which  to 

pay  all  company  balances.  This  results  in  a 
Separate  separation  of  what  are  really  trust  funds,  and 

Bank  serves  as  a  good  check  on  collections.    It  goes 

Account  without  saying  that  balances  should  be  paid 

to  the  company  within  the  time  agreed  upon. 
Indeed,  some  companies  will  not  retain  an  agent  who  is  con- 
tinually delinquent  in  this  regard,  for  they  argue  that  a  man 
who  is  careless  about  money  matters  is  not  usually  the  type 
to  make  a  reliable  agent. 

There  is  probably  no  part  of  an  agent's  work  that  causes 
him  more  annoyance,  if  not  worry,  than  that  of  making  col- 
lections, and  often  it  is  the  least  systemi^ed. 
Collection        Local  customs,  the  character  of  his  clientele 
of  and   other   considerations   affect   the   methods 

Premiums        which  may  be  successfully  employed,  and  no 
one  method  will  prove  suitable  in  all  cases. 
By  far  the  great  majority  of  business  houses  make  their 


40  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

collections  by  mail,  which  may  be  taken  as  good  evidence  that 
this  method  has  been  found  more  satisfactory  on  the  average 
than  by  personal  calls,  and  there  seems  to  be  no  good  reason 
for  believing  that  this  system  cannot  be  made  successful  when 
applied  to  insurance  agency  collections. 

If  mail  collections  are  to  be  attempted,  a  system  for  keep- 
ing track  of  unpaid  accounts,  and  following  them  up,  will 
prove  helpful  if  not,  indeed,  necessary,  and  the  suggestions 
offered  here  may  serve  as  a  basis  for  building  one  adapted 
to  the  particular  needs  of  a  given  agency. 

It  may  be  taken  for  granted  that  a  bill  for  the  premium  is 
sent  at  the  same  time  that  a  policy  is  delivered.     This  bill 

may  be  made  in  duplicate,  and  the  copy  filed  in 
Systems  a  loose  leaf  collection  book,  to  be  followed  up 

in  any  manner  decided  upon. 

Another  and  more  comprehensive  system  requires  a  file 
having  31  compartments,  one  for  each  day  of  the  month. 
Each  bill  is  made  out  in  triplicate,  each  copy  of  a  different 
color.  For  instance,  the  original  may  be  white,  the  duplicate 
blue  and  the  triplicate  red. 

The  duplicate  and  triplicate  are  placed  in  the  compartment 
of  the  collection  file  corresponding  to  the  date  on  which  the 
policy  takes  effect.  AVhen  bills  are  paid,  the  duplicates 
and/or  triplicates  are  removed  and  destroyed,  having  served 
their  purpose. 

Assume  that  this  system  has  been  in  operation  for  one 
month,  and  that  it  has  been  decided  to  follow  up  collections 
on  the  basis  of  monthly  periods  from  the  date  of  policy ;  then, 
on  each  working  day  of  the  month  the  duplicate  bills  (blue) 
are  taken  out  of  the  compartment  of  the  collection  file  for  the 
corresponding  day  of  the  previous  month,  and  mailed  to  the 
customer,  leaving  the  triplicate  (red)  in  the  file,  A  form 
letter  may  be  sent  with  the  duplicate  bill,  and  may  read 
somewhat  as  follows: 

'*  Following  our  usual  custom  we  are  mailing  you  the 

enclosed  statement  for  $... ,  having  found  that  a 

majority  of  our  customers  prefer  to  receive  and  pay  their 
bills  by  mail  rather  than  through  a  personal  visit.  If, 
however,  we  can  be  of  any  service  to  you  by  calling,  or 
any  explanation  of  the  statement  is  desired,  please  ad- 


GENERAL    OFFICE    WORK  41     i 

vise  US  and  we  will  be  very  glad  to  see  you  promptly  on        \ 
the  matter."  | 

On  the  corresponding  day  of  the  following  month,  or  such  ] 

other  period  of  time  as  may  be  deemed  desirable,  the  tripli-  j 

cates  (red)  are  removed  from  the  collection  file,  ; 

Past  Due  and  given  such  treatment  as  may  seem  best,  ; 

File  and  may  be  then  placed  in  another  file,  called  : 

the  Past  Due  File,  to  be  followed  up  as  each  j 

separate  case  demands.     Sometimes  at  the  end  of  sixty  days  j 

a  letter  reading  somewhat  as  follows  will  prove  effective :  i 

**In  calling  your  attention  again  to  the  statement  of  i 

premiums  due  our  office,  amounting  to  $ ,  we  are  ■ 

led  to  explain  that  our  Companies  give  us  only  a  limited  i 
time  in  which  to  remit  for  insurance  written. 

We  are  obliged  to  account  within  a  few  days  for  the        \ 
premiums  shown  on  said  statement,  and  therefore  ask 
you  to  let  us  have  check  in  order  that  we  may  make 
proper  remittance  to  the  Companies.  ' 

We  feel   sure  you  will  agree  with  us  that  since  the        | 
Companies   are   expected   to — and  do — pay   their  losses 
promptly,  it  is  only  fair  that  they  should  receive  the 
premiums  promptly  from  their  agents,  and  that  you  will        i 
cooperate  with  us  to  that  end.  ] 

Thanking  you  in  advance,  we  remain,"  ■ 

If  this  letter  does  not  bring  the  money,  it  is  sometimes  felt  j 

desirable  to  send  a  notice  that  the  Company  requires  the  \ 

premium  or  the  cancellation  of  the  policy.    In  ■ 

Payment  or     sending  such  a  letter,  if  it  is  desired  to  be  a  ; 

Cancellation    cancellation  in  case  the  premium  is  not  paid 

within  the  time  stated,  care  must  be  exercised  ■ 

to  make  the  notice  unequivocal  in  its  terms,  and  it  is  believed  j 

that  the  following  phraseology  will  serve  that  purpose:  ; 

i        *'In  accordance  with   customary  rules,   the   Example  ; 

^    Insurance  Company  requires  me  to  remit  the  premium  of  \ 

$ on  policy  No issued  to  j^ou  and  cov-  j 

ering  on situate ,  or  to  cancel  ] 

said  policy  in  accordance  with  its  conditions.     (See  lines  J 

I      to inclusive.)  ■ 

f        The   PREMIUM   REMAINING   UNPAID,   I   am   re-       \ 

luctantly  compelled  as  agent  of  said  Company  to  notify        ! 
you  of  its  election  to  cancel  the  policy  at  the  expiration        \ 


42  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

of  five  days  from  receipt  by  you  hereof.  All  liability 
thereunder  on  the  part  of  the  Company  will  cease  and  de- 
termine at  the  expiration  of  the  said  five  days,  unless 

during  such  period  the  premium  of  $ is  paid  at 

my  office  (give  address). 

Regretting  the  necessity  of  this  action  and  hoping  to 
hear  from  you,  I  remain, 

Yours  very  truly. 


Agent." 

In  order  to  have  proof  of  cancellation  in  case  the  premium 
is  not  paid,  it  will  be  necessary  to  send  the  foregoing  notice 
by  registered  mail  and  obtain  the  registry  return  receipt,  or 
to  give  the  notice  in  some  other  legal  manner.  (See  Can- 
cellations.) 

It  seems  desirable  to  send  a  second  letter  after  a  period  of 
from  seven  to  ten  days,  and  if  by  any  chance  the  first  letter 
is  not  registered  this  second  one  should  be.  This  second 
letter  may  read  as  follows: 

**This  is  to  notify  you  that  policy  No of  the 

Company,  issued  to  you  and  covering  on 


at ,  has  been  cancelled  for  non- 
payment of  premium  by  the  notice  sent  you  under  date 
of  (date),  in  accordance  with  the  policy  conditions  con- 
tained in  lines to inclusive. 

Please  note  that  you  are  therefore  without  the  pro- 
tection of  such  policy,  and  return  it  to  us  for  our  files. 

Wo  also  request  that  you  pay  us  the  sum  of  $ , 

being  the  amount  of  the  pro  rata  earned  premium  from 
the  beginning  of  the  policy  to  its  cancellation." 

If  the  policy  was  made  payable  to  a  mortgagee,  ten  days' 
notice  should  be  sent  by  registered  mail  cancelling  the  mort- 
gagee clause.     (See  Cancellations.) 

If  loss  was  made  payable  to  a  payee  who  was  not  a  mort- 
gagee, a  five  days'  notice  should  be  sent  by  registered  mail. 
(See  Cancellations  Page  144,  Form  Two.) 

It  may  be  of  interest  to  know  that  agencies  do  not  lose 
on  the  average  more  than  I/2  of  1%  per  annum  on  un- 
collectible accounts. 


GENERAL   OFFICE   WORK  4S 

OFFICE  RECORDS. 

There  are  a  great  variety  of  systems  in  use  by  agents  for 
the  keeping  of  agency  records  and  accounts. 

The  simplest  system  for  a  small  agency  is  to  use  the  register 
of  each  company  as  the  record  of  all  policies  and  endorse- 
ments issued  for  such  company;  as  an  expira- 
Registers  tion  record,  and  even  as  customers'  ledger  and 

cash  book.  It  takes  less  bookkeeping  than  any 
other  method,  and  where  the  agent  does  not  maintain  an  office 
force  it  usually  works  very  well,  but  it  will  only  serve  for  a 
small  business,  where  the  risks  are  mostly  of  small  value, 
with  only  one  or  two  policies  to  a  risk. 

A  system  which  can  be  used  for  a  larger  business  utilizes 
the  individual  register  of  each  company  to  record  all  poli- 
cies issued  in  such  company,  or  one  large  register  in  which 
to  record  the  policies  of  all  companies  represented,  or  the 
duplicate  daily  report  system.  This  is  supplemented  by  a 
cash  book  and  ledger  and  sometimes  by  a  journal.  The  ex- 
pirations are  posted  to  an  expiration  register,  keeping  each 
month  of  each  year  by  itself,  or  to  a  card  system  by  months 
of  each  year,  or  to  a  system  of  individual  cards  for  each  risk, 
filed  by  years,  months  and  days  of  the  month. 

The  tendency  of  the  more  modern  office  is  to  keep  every- 
thing by  card  system  and  loose  leaf  books.    There  are  many 

such  systems  in  use  and  almost  any  of  the  large 
Card  office  supply  houses   (names  furnished  on  re- 

System  quest)  will  design  one  for  the  special  needs  of 

any  office,  or  may  be  able  to  furnish  stock  cards 
for  the  purpose. 

The  system  outlined  here  is  taken  from  various  sources  and 
is  intended  for  use  in  an  up-to-date  office  where  the  business 
is  of  considerable  volume.  The  system  starts  with  the  making 
of  a  duplicate  daily  report  for  each  policy  issued,  the  original 
daily  report  being  sent  to  the  company  and  the  duplicate  con- 
stituting the  original  agency  record.  The  duplicate  daily 
reports  of  each  company  are  usually  kept  together  in  a  file, 
either  in  numerical  order  or  by  expiration.  The  following 
chart  illustrates  the  main  elements  of  the  system ;  sample  of 
each  card  is  printed  herewith : 


44 


THE  AGENTS   KEY  TO   FIRE  INSURANCE 


DUPLICATE  DAILY  REPORT 


Journal  and 
Cash  Book 


Expiration    Card. 


Loca^tion.  Card 
nsureds  Card  ^~ 
to  Customer  I 


Prems.ReceiVaible 

Ledger  and 
Company  Register 


Monthly  Account 


General 


Ledq( 


The  cards  used  for  recording  (a)  expirations,  (b)  amount 
at  risk  in  each  location,  (c)  insurance  for  customer  at  each 
location  and  (d)  bill  to  insured,  have  been  designed  so  all 
may  be  typewritten  at  one  operation  by  use  of  carbon  paper. 

To  insure  immediate  recognition  and  to  aid  in  correct 
filing  they  may  be  clipped  or  notched;  expiration  cards 
notched  in  center  of  top,  location  cards  clipped  upper  right 
corner,  insured's  card  clipped  upper  left  corner.  By  this 
means  one  cannot  be  misfiled  with  the  others  without  instant 
detection. 

Each  card  shows  a  circle  in  the  upper  right  hand  corner; 
also  a  space  for  numbering.  As  cards  are  filed  they  should 
be  numbered  consecutively  when  there  is  more  than  one  card 
for  a  given  location,  or  for  one  insured,  and  as  each  is 
numbered  an  X  should  be  put  in  the  circle  on  the  prior  card. 
Thus,  an  uncrossed  circle  on  card  indicates  it  is  the  last  one 
for  that  particular  location  or  insured. 

Expiration  Card.  (6x4)  The  purpose  of  this  card  is  to 
keep  a  record  of  all  the  business  by  expiration  dates  and  to 
make  certain  that  no  policy  is  permitted  to  expire  without 
being  noticed.  These  cards  are  filed  first  as  to  years,  then 
as  to  months,  then  as  to  days  of  the  month. 

It  is  suggested  that  different  colors  of  cards  be  used  to 
serve  as  a  check  on  the  correctness  of  the  expiration  date, 
one  for  each  of  five  years  of  expirations  (few  policies  being 
issued  for  more  than  a  five-year  term).  Distinctive  colors 
should  be  chosen,  distinguishable  in  any  light,  such  as,  1922 
blue,  1923  buff,  1924  orange,  1925  green,  1926  red;  all  short 
terms  expiring  in  year  written,  and  long  terms  (over  5  years) 
white.    The  colors  may  be  repeated  at  5-year  intervals. 

Since  the  value  of  the  system  depends  on  the  use  of  the 
proper  color  for  the  year  of  expiration,  all  expiration  cards 


GENERAL   OFFICE   WORK 


45 


before  being  filed  should  be  run  over  to  see  that  the  color 
and  expiration  correspond.  When  filed  by  years  there  should 
be  only  two  colors  together,  that  chosen  for  the  particular 
year,  and  white  for  the  short  and  long  terms,  and  any  other 
color  will  be  misfiled. 


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46 


THE  AGENTS  KEY  TO  FIRE  INSURANCE 


Location  Card.  (6x4)  This  card  is  used  to  show  the  ' 
amount  at  risk  in  any  one  location,  as  32  State  Street,  and  j 
these  cards  are  filed  by  street  and  number.  j 


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GENERAL   OFFICE   WORK 


47 


Insured's  Card.  (6x4)  This  card  is  intended  to  be  a 
complete  record  of  all  the  insurance  for  a  given  insured  at 
a  given  location,  and  a  card  is  made  for  each  insured  at  each 
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THE  AGENTS  KEY  TO  FIRE  INSURANCE 


Bill  to  Customer.  (6x4)  On  direct  business  this  bill  may 
be  sent  with  the  policy  to  the  insured.  When  the  business 
is  chargeable  to  a  broker  the  bills  may  be  kept  untjl  the  end 
of  the  month  (filed  alphabetically  by  brokers)  and  a  state- 
ment of  all  premiums  due  sent  at  that  time. 


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GENERAL    OFFICE    WORK 


49 


Company  Register  and  Premiums  Receivable  Ledger 
(15x81/2  or  15x17).  This  book  serves  two  purposes.  On 
the  left  hand  page  it  gives  a  consecutive  record  of  policies 
issued  for  each  company  in  the  Agency  with  other  infor- 


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THE  AGENTS  KEY  TO  FIRE  INSURANCE 


mation  needed  for  the  monthly  account,  as  shown.  The 
left  side  of  the  sheet  is  so  arranged  that  a  carbon  copy 
may  be  made,  such  premium  list  to  be  sent  to  the  company, 
totals  only  being  carried  into  the  regular  account  blank 
under  this  system. 


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GENERAL    OFFICE    WORK  51 

The  right  side  of  the  sheet  shows  commission  to  broker 
(if  any),  net  premium  to  agency,  name  of  assured  and 
broker. 

This  register  together  with  the  right  hand  page  which  has 
columns  for  payments  and  balances  by  months  constitutes 
a  ledger  and  monthly  trial  balance  that  is  quickly  proved 
even  when  there  is  a  large  volume  of  business.  Return 
premiums  are  entered  in  red  on  sheets  similarly  ruled  but 
with  appropriate  changes  in  the  headings.  This  ledger  is 
controlled  by  a  ** Premiums  Receivable''  account  in  the 
general  ledger. 

Monthly  Account — Premium  List.  This,  as  explained  pre- 
viously, is  an  exact  carbon  duplicate  of  the  left  side  of  the 
register  over  to  the  column  for  ''Commission  to  Broker." 
A  margin  should  be  left  on  the  right  side  of  this  duplicate 
so  that  the  Company  office  will  have  room  for  notation  of 
original  premiums  on  the  return  premium  lists. 

Card  Filing.  The  use  of  distinctive  colors  for  the  various 
years  of  expiration  will  check  the  correctness  of  the  card  as 
to  the  year,  but  not  as  to  the  month.  This  may  be  accom- 
plished by  either  of  two  methods: 

First,  the  cards  may  have  a  tab  projecting  above  the  top 
line  of  the  card,  so  placed  as  to  denote  the  respective  months 
of  the  year.  With  this  method,  when  all  October  cards,  for 
example,  are  filed  the  tabs  will  show  a  straight  line  along 
the  top  of  the  October  file,  and  any  tab  out  of  line  will  denote 
a  misfiled  card.  The  objection  to  such  a  card  is  the  likelihood 
of  the  tab  being  broken  off  in  handling. 

Second,  the  card  may  have  a  notch  cut  into  the  top  line  of 
card  in  place  of  a  tab  projecting  above.  With  this  method, 
when  all  October  cards,  for  example,  are  filed  the  notches  will 
show  in  the  form  of  a  groove  along  the  top  of  the  October 
file,  and  any  break  in  the  groove  will  denote  a  misfiled  card. 
The  notched  cards  may  be  handled  without  much  chance  of 
injury. 

The  top  line  of  the  two  forms  of  cards  will  appear  as 
illustrated : 


/-"X 


TaJD 


Notch  \ J         I 


52  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

Color  Expiration  System.  A  suggested  system  for  over- 
coming the  labor  of  entering  expirations  on  a  register  or  on 
cards  is  as  follows: 

Each  company's  daily  reports  to  be  used  for  original  and 
duplicate,  and  an  agent's  daily  report  as  a  triplicate.  This 
agent's  triplicate  daily  report  to  be  practically  a  blank,  so 
that  it  will  record  the  essential  information  no  matter  in 
what  form  the  original  daily  report  is  arranged.  Thus  each 
daily  report  will  give  the  amount,  rate,  premium,  name  of 
insured,  commencement,  term  and  expiration.  A  copy  of  the 
form  should  be  pasted  thereon  unless  the  form  has  been 
written  on  the  policy  itself. 

This  triplicate  to  be  in  different  colors,  one  for  each  of 
five  years  of  expirations.  For  example,  for  business  written 
in  1922  the  following  distinctive  colors,  discernible  in  any 
light  if  properly  chosen,  may  be  used  for  each  respective  year 
that  policies  expire:  1923  blue,  1924  buff,  1925  orange,  1926 
green,  1927  red,  and  all  short  terms  (expiring  in  1922)  or 
long  terms  (over  five  years)  white.  When  the  expirations 
for  January,  1923,  are  desired,  the  whole  January  file  will 
be  run  over  and  the  blue  and  white  triplicates  picked  out; 
so  with  all  other  months  of  that  year.  Beginning  1924  all 
buff  and  all  white  daily  reports  will  be  picked  out.  When  it 
comes  time  to  write  five-year  business  expiring  in  1927  the 
blue  daily  reports  will  again  be  used,  since  all  blues  denoting 
1923  will  have  been  picked  out  for  each  month  before  the 
1928  daily  reports  for  that  month  are  ready  for  filing;  thus 
blues  will  be  1923  and  1928,  buffs  1924  and  1929,  etc.  Since 
the  accuracy  of  the  record  depends  on  the  use  of  the  proper 
color  for  the  year  of  expiration,  all  daily  reports  before  be- 
ing filed  should  be  run  over  to  make  sure  the  color  used  is 
the  correct  one.  A  system  could  be  arranged  to  check  the 
triplicates  against  the  duplicates,  but  it  would  entail  con- 
siderable work  and  seems  unnecessary.  The  duplicates  will 
be  filed  by  months  and  each  company 's  business  separately  in 
numerical  order  without  reference  to  year  of  expiration. 
All  endorsements  and  cancellations  should  be  recorded  on 
both  duplicate  and  triplicate  daily  reports. 

Correspondence.  There  is  little  to  say  about  letter  writing 
in  the  insurance  business  that  does  not  apply  equally  in  other 
lines  of  work.  It  is  proverbial  that  clear,  simple,  concise, 
and  courteous  letters  are  an  asset  to  any  business.  It  is  ob- 
vious that  information  sought,  by  client  or  company,  should 
be  promptly  furnished.     Sometimes  this  is  not  possible  and 


GENERAL    OFFICE    WORK  bo      \ 

many  agents  make  a  practice  of  acknowledging  letters,  where  j 
a  full  and  complete  answer  can  not  be  sent  at  once,  by  using  j 
a  card  or  printed  sheet  reading  somewhat  as  follows ;  I 

19..  i 

Dear  Sir(s) :  ] 

Your  letter  of is  receiving  careful  ; 

attention.    Reply  will  be  made  within  a  short  time.  ] 

j 

Agent.  i 

Nothing  is  much  more  annoying  than  to  have  letters  ig-    ' 
nored  that  call  for  a  reply,  and  this  simple  acknowledgment 
shows  that  a  letter  is  not  overlooked,  at  the  same  time  giving 
opportunity  to   obtain  the   desired   information   or  to   take 
necessary  action.  \ 

Instructions.    Each  company  has  its  own  system  of  under-  j 

writing  and  its  own  methods  of  operation.     Its  success  de-  j 

pends  in  large  measure  upon  the  cooperation  of  its  agents.  ] 

Unless  they  carefully  and  intelligently  follow  its  policy  in  j 

the  selection  of  business  and  in  the  lines  written  on  indi-  ^ 

vidual  risks  or  in  congested  sections,   the  success  of  both  ] 

company  and  agent  will  be  endangered.    The  agent  who  fol-  , 

lows  the  company's  instructions  carefully  and  promptly  not  | 

only  does  his  share  in  the  maintenance  of  its  system  of  aver-  i 

age,  but  also  escapes  any  personal  liability  which  he  might  j 

be  assuming  by  failure  to  observe  same.  j 

Reporting  Losses.     The  agent  should  notify  the  company  j 

as  soon  as  possible  after  a  loss  has  occurred.     Some  com-  ' 

panics  request  telegraphic  notice  if  their  share  of  the  loss  \ 

exceeds  $100  and  the  following  form  of  telegram  is  recom-  • 

mended :  ' 

j 

** per   cent,   loss  policy   Seven   Sixty-one  \ 

Richards.    (Name  of  Company)  (Name  of  Company)  also  j 

interested. ' '  \ 

The  last  three  numbers  of  the  policy  or  policies  involved  is  i 

suflftcient.    The  telegraphic  notice  is  usually  sent  to  the  com-  j 

pany  and  is  followed  by  a  mail  notice,  using  the  standard  j 

blank  furnished,  one  copy  thereof  also  being  sent   to   the  ^ 

Special  Agent.    It  will  be  noted  that  this  blank  calls  for  cer-  | 

tain  definite  information  and  this  should  be  given  where  pos-  1 


54  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

sible  to  furnish  it,  particularly  information  as  to  property 
damage  and  estimated  loss  thereon  (expressed  in  percentage 
of  the  insurance  rather  than  of  the  value),  the  cause  of  fire, 
and  where  it  originated.  Any  other  pertinent  information  of 
possible  value  to  the  company  or  its  adjuster  or  field  man 
should  also  be  given.     (See  * 'Losses.") 


CHAPTER  VI 

WRITING  POLICIES  AND  ENDORSEMENTS 

Signing  Forms  and  Policy — Titles — Amount,  Rate 
AND  Premium — Term — Perpetual  Policies — De- 
scription OF  Property — Location — Occupancy — 
Rubber  Stamps — Endorsements  (with  Samples). 


Each  policy  should  state  the  full  name  of  insured,  amount, 
rate,  premium,  commencement,  term  and  expiration,  together 
with  a  complete  description  of  the  property 
The  Policy  covered  and  its  location.  Avoid  all  abbrevia- 
tions, erasures  or  interlineations.  The  phrase, 
**etc.,'*  should  not  be  used,  but  instead  **and  other  similar 
property.''    Neither  should  the  term,  **et  al"  be  used. 

The  rule  should  always  be  followed  of  writing  a  policy  in 
such  clear,  explicit  and  unmistakable  terms,  that  no  question 
will  arise  regarding  the  insured,  the  property  covered  or  its 
location,  or  any  of  the  conditions  set  forth  in  the  form. 

Signing  the  Forms  and  Policy.  Each  separate  form,  or 
rider,  attached  to  a  policy  should  bear  the  following  or  simi- 
lar language:    ** Attached  to  and  forming  part  of  policy  No. 

of  the Ins.  Co Agent." 

and  should  be  signed  in  ink  by  the  agent,  or  his  name  written 
or  stamped  thereon,  together  with  the  name  or  initials  of 
the  one  affixing  same. 

The  policy  itself  should  be  signed  in  ink  by  the  agent,  or 
by  one  who  has  been  authorized  to  sign  his  name  for  him. 
The  object  of  signing  in  ink  is  because  a  pencil  mark  may 
smear,  blur  or  be  erased.  The  object  of  appending  the  initials 
of  one  signing  agent's  name  is  to  provide  identification  of 
the  signature  in  case  it  is  necessary  to  prove  same.  Rubber 
stamp  signatures  or  those  written  on  a  typewriter  are  espe- 
cially unsatisfactory  unless  initialed,  since  any  one  can  use 
a  stamp  or  typewriter  and  there  is  no  possible  way  of  proving 
from  the  signature  itself  who  affixed  it.  A  signature  in  print 
is  open  to  the  same  objection  unless  initialed. 

Title  (Insured).  It  is  customary  in  writing  the  title  of  a 
policy  in  the  name  of  an  individual  to  use  one  of  the  given 

55 


♦56  THE'  AGENTS   KEY   TO   FIRE  INSURANCE 

names  of  the  insured,  and  if  in  the  name  of  a  married  woman 
to  use  her  given  name. 

The  following  are  examples  of  familiar  titles : 
John  R.  Doe. 

John  R.  Doe  and  Richard  Roe,  as  interest  may  appear. 
Doe  &  Roe,  as  now  or  hereafter  constituted. 
The  Roe  Engineering  Co.,  Inc. 

Richard  E.  Roe  &  The  Roe  Engineering  Co.,  Inc.,  as  in- 
terest may  appear. 
John  R.  Doe,  Contractor,  &  Richard  E.  Roe,  as  interest 

may  appear. 
John  R.  Doe,  Referee   (or  Trustee)   in  bankruptcy  for 

Richard  E.  Roe. 
John  R.  Doe,  as  Trustee  for  whom  it  may  concern. 
John  R.  Doe,  for  account  of  whom  it  may  concern. 
John  R.  Doe,  as  Trustee  (or  Guardian)  for  Richard  E. 

Roe  (infant). 
John  R.  Doe,  Executor  (or  Administrator)  of  Richard  E. 

Roe,  deceased. 
John  R.  Doe,  Kate  S.  Roe,  and  Kate  S.  Roe,  as  Trustee 

(or  Guardian)    for  Arthur   T.   Roe,   infant,  heirs  of 

James  C.  Roe,  deceased. 
Estate  of  James  C.  Roe,  deceased. 
Heirs  of  James  C.  Roe,  deceased. 

*  'As  interest  may  appear."  This  phrase  is  often  used  where 
owner  and  lienor,  owner  and  contractor,  owner  and  tenant, 
or  vendor  and  vendee  desire  protection  under  one  policy. 
By  so  doing  two  interests  are  covered  without  stating  the  pre- 
cise interest  of  each.  It  relieves  the  insured  from  the  war- 
ranty as  to  sole  and  unconditional  ownership.  The  phrase 
is  employed  rather  indiscriminately,  but  there  is  usually  no 
harm  in  its  use  and  there  are  circumstances  when  it  is  ad- 
visable if  not  necessary.  Moreover,  when  used  it  gives  each 
interest  the  right  to  demand  payment  to  it  individually  of  a 
loss  sustained,  in  accordance  with  the  terms  and  conditions 
of  the  policy  contract,  to  the  property  owned  by  such  interest. 
This  right  is  very  seldom  exercised,  for  insurance  companies 
customarily  pay  a  loss  by  draft  made  to  the  several  interests 
as  designated  in  the  policy,  leaving  the  division  of  the  money 
to  those  entitled  thereto. 

"As  Now  or  May  be  Hereafter  Constituted."  This  phrase 
is  used  in  order  to  keep  the  insurance  valid,  or  avoid  possible 


WRITING    POLICIES    AND    ENDORSEMENTS  57 

dispute,  in  case  of  changes  in  name  or  personnel  of  the  in- 
sured which  might  involve  a  change  of  interest.  For  example, 
if  a  copartnership  takes  in  a  new  partner  the  interest  is  held 
to  be  changed,  but  not  if  a  partner  retires,  nor  if,  without 
new  partners,  the  firm  name  changes.  In  the  latter  case,  how- 
ever, it  is  usually  felt  desirable  to  change  the  title  of  the  in- 
surance. 

Estates.  In  writing  insurance  for  an  estate  it  is  never  ad- 
visable, if  it  can  be  avoided,  to  write  it  as  in  the  last  two 
titles  given  in  the  foregoing  list,  for  the  reason  that  if  loss 
occurs  the  insurance  company  will  not  know  to  whom  loss 
should  be  payable  except  by  evidence  outside  of  the  policy 
contract,  and  sometimes  it  is  difficult  to  get  a  satisfactory 
release  of  the  insurance  company's  obligation  to  pay  the 
amount  of  any  loss  to  heirs,  or  others,  who  may  have  an  in- 
terest in  the  property  covered.  This  is  especially  true  when 
the  policy  is  written  under  the  title  of  ^'Estate  of  James  C. 
Roe,  Deceased,"  and  it  is  found  that  the  insured  has  left  no 
will.  The  question  then  arises,  *'Who  are  the  heirs,  and  who 
is  entitled  to  an  interest  in  the  estate?"  and  the  company 
is  not  likely  to  pay  any  loss  until  that  question  is  answered. 
When  it  becomes  necessary  to  insure  against  loss  to  prop- 
erty of  the  estate  of  a  deceased  person  where  there  is  no 
will,  it  is  best  to  insert  a  condition  after  this  form :  **Loss,  if 
any,  to  be  adjusted  with,  payable  to  and  recoverable  by  John 
R.  Doe,  and  by  him  only,"  substituting  for  "John  R.  Doe" 
the  name  of  some  person  representing  all  parties  in  interest, 
or  at  least  those  thereof  at  whose  instance  the  insurance  is 
procured. 

"For  Whom  It  May  Concern."  This  phrase  is  chiefly  in- 
tended for  use  when  '*John  R.  Doe"  (the  insured  specifi- 
cally named)  desires  to  protect  by  insurance  other  and  vari- 
ous parties,  who  it  may  be  are  constantly  changing.  It  is 
held  that  the  interests  protected  by  these  words  must  be  such 
interests  as  were  contemplated  by  the  one  securing  the  policy; 
they  need  not  necessarily  be  particular  individuals,  but  may 
be  a  certain  class  of  individuals.  As  illustrative :  Insurance 
taken  out  in  the  name  of  an  owner  of  an  elevator  or  cold 
storage  plant  to  cover  grain  or  produce  by  whomsoever  owned 
while  contained  therein. 

This  phrase  will  protect  those  intended  to  be  covered  who 
have  property  involved  in  a  loss,  regardless  of  whether  they 


58  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

had  an  interest  at  the  time  the  insurance  was  taken,  out,  or 
acquired  it  subsequently;  it  gives  each  such  owner  the  same 
right  as  do  the  words  **held  in  trust/'  (see  Commission 
Clauses),  viz.,  subsequent  to  a  fire  to  ratify  the  insurance,  even 
though  previously  ignorant  of  its  existence,  and  take  the 
benefit  thereof. 

Policies  written  in  the  name  of  ''John  R.  Doe,  for  account 
of  whom  it  may  concern, '^  should  have  a  clause  inserted, 
reading,  ''Loss,  if  any,  to  be  adjusted  with,  payable  to  and 
recoverable  by  John  Doe  and  by  him  only,''  and  should  also 
exclude  property  specifically  insured  (See  Exclusion  Clauses). 

POLICY  WRITING 

Amount.  The  amount  for  which  a  policy  is  written,  com- 
monly called  its  "face,"  should  agree  with  the  amount  stated 
on  the  form,  if  but  a  single  item  is  covered,  or  should  equal 
the  sum  of  the  amounts  of  all  items,  if  there  are  two  or  more. 
The  exception  to  the  latter  is  where  the  amount  of  the  policy, 
being  only  a  portion  of  the  total  insurance,  is  intended  to 
cover  pro  rata  of  all  the  items. 

Where  a  form  is  used  that  has  two  or  more  items,  such  as 

"$ on  building,  $ on  machinery  therein," 

but  the  whole  amount  of  the  policy  is  to  cover  on  but  one  of 
the  items,  the  word  "Nil"  or  "Nothing"  should  be  entered 

in   the  space  after  the   sign  "$ "     Otherwise   the 

policy  may  be  held  to  cover  blanket  over  all  the  items. 

Rate  and  Preniimn.  Rates  are  customarily  based  upon 
$100  of  insurance  for  the  term  of  one  year;  thus  a  rate  of 
60c  means  60c  per  $100  per  annum.  The  amount  of  policy 
multiplied  by  the  rate  will  result  in  the  premium;  thus  $1,000 
of  insurance  at  the  rate  of  60c  calls  for  a  premium  of  $6.00. 

Commencement,  Term  and  Expiration.  The  commencement 
of  the  policy  is  the  date  on  which  the  insurance  is  to  take 
effect.  The  term  is  the  length  of  time  for  which  it  is  to  cover. 
Local  underwriting  rules  customarily  determine  the  terms, 
i.  e.,  the  length  of  time,  for  which  various  classes  of  prop- 
erty may  be  written  and  the  rates  therefor.  Usually  policies 
are  written  for  periods  of  one  year  or  less,  three  years  and 
five  years. 


WRITING    POLICIES    AND    ENDORSEMENTS  59 

Wide  latitude  is  given  in  changing  by  endorsement  the 
printed  or  written  conditions  of  the  policy,  but  the  term  and 
expiration  sl^ould  never  be  changed  by  endorsement;  the 
policy  should  be  cancelled  and  rewritten,  or,  in  rare  cases 
may  be  changed  by  erasure. 

Perpetual  Policies.  Some  companies  issue  perpetual  poli- 
cies which  run  without  limit  of  time  and  are  usually  issued 
only  at  the  head  office  of  the  company  and  under  special 
circumstances.  A  deposit  premium  is  paid  and  no  further 
premium  is  necessary  unless  conditions  surrounding  the  prop- 
erty call  for  a  readjustment  of  the  rate.  Customarily  these 
policies  may  be  cancelled  by  either  the  insured  or  the  com- 
pany. In  the  former  case  90%  of  the  deposit  premium  is  re- 
turned to  the  insured  and  in  the  latter  case  all  of  it  is  re- 
turned. 

Description.  Descriptions  of  buildings  in  policy  forms  are 
somewhat  a  matter  of  local  custom  and  rating  methods,  but, 
generally  speaking,  dwellings  are  described  by  height,  roof 
and  construction,  as  for  example,  *Hhe  two  story,  shingle 
roof,  frame  dwelling. '^  Other  classes  of  buildings  are  de- 
scribed by  construction  only.  When  buildings  do  not  show 
on  insurance  maps  it  is  customary  to  describe  them  in  more 
detail  in  the  policy  form. 

When  insuring  contents,  the  form  should  specifically  de- 
scribe them,  with  necessary  detail,  followed  by  the  words, 
** while  contained  in,"  followed  in  turn  by  a  description  of 
building  and  its  location. 

Location.  The  location  should  be  explicit  so  that  there  is 
no  mistaking  the  situation  of  the  property  described,  as  for 
example,  **  situate  No.  24  State  Street,  Rochester,  N.  Y.,"  or 
''East  side  of  State  Street  about  170  feet  North  from  Main 

Street"  or  *'Lot  No ,  Block  No "  together 

with  the  division  or  sub-division  if  necessary,  or  "Westerly 
side  of  Long  Street,  being  the  house  now  occupied  by  James 
Roach."  There  are  various  ways  of  describing  property  lo- 
cated in  the  country,  as  for  example,  ''situate  westerly  side 
of  main  road  from  Norfolk  to  Suffolk  in  Kent  Township, 
Middlesex  County,  N.  J."  In  some  parts  of  the  country  it 
is  customary  to  give  the  Section,  Township  and  Range  num- 
bers. 


60  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

Occupancy.  Most  rating  organizations  and  companies  re- 
quire that  the  nature  of  the  occupancy,  or  the  general  class 
of  occupancy,  be  stated  in  the  form.  It  therefore  may  be 
laid  down  as  a  rule  that  same  should  always  be  stated,  as  for 
example,  **as  a  dwelling,"  **as  a  store  and  dwelling,"  "for 
mercantile  purposes,"  or  **as  a  shoe  factory,"  etc.  Some- 
times local  underwriting  rules  require  the  specific  nature  of 
the  occupancy  to  be  stated.  Then  it  will  not  be  sufficient  to 
say,  **for  mercantile  purposes,"  but  instead  must  state,  for 
example,  **as  a  hardware  store."  It  is  not  advisable  to  use 
the  expression  ** while  occupied  as,"  except  in  those  cases 
where  the  agent  and/or  company  desires  to  specifically  re- 
strict the  occupancy  to  that  stated  in  the  policy,  then  it  is 
best  toisay  **only_while  occupied  as." 

Rubber  Stamps.  The  courts  have  held  that  any  provision 
of  a  policy  that  is  not  legible  shall  not  be  binding  on  the 
insured,  therefore  if  a  rubber  stamp  is  used  care  must  be 
exercised  that  the  imprint  on  the  policy  shall  be  clear  and 
easily  decipherable.  For  this  purpose  red  ink  is  preferable, 
as  being  more  distinct. 

POLICY  CHANGES 

A  policy  sometimes  requires  changes  in  amount,  rate,  form 
or  conditions,  in  which  case  an  endorsement  thereon,  written, 

typewritten,  or  printed,  is  necessary.  Such 
Endorsements    endorsement,  if  on  a  separate  piece  of  paper, 

should  bear  the  name  of  the  issuing  agency, 
policy  number,  name  of  insured,  and  the  date  and  nature  of 
the  changes  expressed  in  clear  and  unambiguous  language. 
The  endorsement  should  be  signed  (with  date  stated)  by  the 
agent  (see  Signing  the  Forms)  and  securely  pasted — not 
pinned — upon  the  policy.  A  full  and  complete  copy  of  the 
endorsement,  in  the  exact  language  thereof,  should  be  filed 
with  the  agent's  records  and  a  similar  copy  forwarded  to  the 
company',  with  any  explanation  necessary  or  desirable.  Each 
endorsement  should  bear  the  following  or  a  similar  phrase : 

**  Attached  to  and  forming  part  of  Policy  No 

of  the .Insurance  Company. 

Agent." 

There  is  no  one  general  form  or  set  phraseology  used  but 
it  is  always  well  to  give  the  date  from  which  the  endorsement 
is  to  take  effect,  such  as  stating,  "From  date  hereof,"  or 


WRITING    POLICIES    AND    ENDORSEMENTS  61 

"On  and  after   (date)."     A  few  illustrations  of  the  more 
frequently  used  forms  of  endorsements  follow: 

Assignment  of  Interest.  Where  property  described  in  a 
policy  changes  ownership,  the  policy  may  be  assigned  to  the 
new  owners.  Most  policies  have  a  place  specifically  provided 
for  this  change,  usually  under  the  headings 

** Assignment  of  interest  by  insured" 

and 

** Consent  by  Company  to  Assignment  of  Interest." 

The  *  ^  assignment "  should  be  signed  by  the  insured  who  is 
transferring  ownership,  and  the  ''consent"  by  the  agent  of 
the  company.  When  such  assignment  is  made  it  should  be 
noted  on  the  agent's  records  and  the  company  advised  in  the 
following  or  similar  language: 

''Interest  of  (name  of  insured)  in  this  policy  as- 
signed to  (name  of  new  owner)  by  consent," 

It  is  rarely  advisable  to  partially  assign  a  policy,  as  for 
example,  where  it  covers  on  a  dwelling  and  on  household 
furniture  therein  and  the  dwelling  is  sold.  Either  cancel  and 
re- write  under  two  policies,  one  for  each  owner,  or  cancel  the 
amount  covering  on  the  property  sold,  and  write  a  new  policy 
thereon  in  the  name  of  the  new  owner. 

Removal.  The  policy  may  be  transferred  to  cover  the  same 
property  in  another  location  (see  exceptions  noted).  The  fol- 
lowing or  similar  language  may  be  endorsed  on  policy : 

''Permission  is  hereby  granted  to  remove  the  prop- 
erty insured  by  this  policy  to  the   situate 

and  this  policy  is  hereby  made  to  cover 

same  property  in  new  location,  all  liability  in  former  lo- 
cation to  cease  from  this  date." 

There  is  usually  no  objection  to  making  the  policy  cover  in 
both  locations  pro  rata  during  removal,  in  which  case  the  fol- 
lowing is  used  in  place  of  the  last  10  words  of  the  foregoing : 

"This  policy  shall  cover  in  both  locations  during  re- 
moval in  the  proportion  that  the  value  in  each  bears  to 
the  value  in  both." 

If  the  rate  is  not  the  same  in  both  locations  then  the  addi- 
tional— or  return — premium  should  be  stated,  being  figured 
usually  on  a  pro  rata  basis. 


62  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

Exceptions : 

The  agent  usually  has  no  authority  to  grant  removal  per- 
mit where  property  is  taken  to  another  state,  or  to  a  town 
or  locality  not  in  the  vicinity  where  he  is  commissioned  to 
act  as  agent,  but  may  be  consented  to  by  the  company. 

Policies  covering  on  grain  in  elevators,  merchandise  in 
storage,  whiskey  in  bonded  or  free  warehouses,  and  similar 
properties,  are  not  usually  transferred,  but  instead  are  can- 
celled at  short  rates. 

The  local  underwriting  rules  will  guide  the  agent  in  this 
respect. 

Changes  in  Cover  or  Items.  Where  a  readjustment  of  the 
insurance  requires  a  change  in  the  form  attached  to  a  policy, 
or  a  change  in  its  items,  the  endorsement  should  clearly  ex- 
press such  change,  for  example  as  follows: 

WHERE  NO  CHANGE  IS  REQUIRED  IN  PREMIUM, 

AMOUNT  OR  ITEMS  BUT  MERELY  A  CHANGE 

IN  FORM. 

''From  date  hereof  this  policy  shall  cease  to  cover  as 
heretofore,  and  shall  apply  as  follows:" 

Below  this  attach  the  new  form. 

WHERE  INSURANCE  APPLYING  ON  ONE  OR  MORE 

ITEMS  OF  A  SCHEDULE  IS  TO  BE  INCREASED, 

BUT  THE  AMOUNT  OF  POLICY  UNCHANGED. 

*'From  date  hereof  the  form  attached  to  this  policy  is 

hereb}^  amended  as  follows:     $ shall  hereafter 

apply  on  item  No ,  covering known  as 

,  and  the  total  amount  of  schedule 

is  increased  to  $ ,  the  amount  of  this  policy  re- 
maining unchanged  and  to  cover  pro  rata  of  all  items." 

WHERE  PREMIUM  IS  CHANGED. 

''In  consideration  of  $ additional  (or  return) 

premium,  from  date  hereof  this  policy  shall  cease  to  cover 
as  heretofore  and  shall  apply  as  follows:" 

To  complete  this  endorsement  a  new  form  may  be  attached 
showing  the  full  amount  by  items,  or  only  the  changes  in  the 
items  affected  may  be  stated. 


WRITING    POLICIES    AND   ENDORSEMENTS  63 

WHERE  PREMIUM  AND  AMOUNT  ARE  CHANGED. 

"In  consideration  of  $ additional  (or  return) 

premium,  the  amount  of  this  policy  is  hereby  increased 
(or  reduced)  $ ,  making  the  total  amount  there- 
of $ and  from  date  hereof  same  shall  cease  to 

cover  as  heretofore,  and  shall  apply  as  follows: 


on  item  No.  1,  covering, 
on  item  No.  2,  covering, 
on  item  No.  3,  covering. 


Partial  Cancellation.  "When  the  amount  of  insurance  is  to 
be  reduced  it  is  often  preferable  to  cancel  the  policy  outright 
and  to  write  a  new  one  for  the  reduced  amount.  Sometimes, 
however,  there  is  good  reason  for  a  reduction  in  the  amount 
of  the  policy,  more  particularly  when  only  one  item  is  af- 
fected, and  in  such  cases  the  endorsement  should  be  made  to 
elearlj'^  express  the  change,  for  example  as  follows: 

**In    consideration    of    $ return    premium 

of  the  amount  of  this  policy  (or  the 


item  of  this  policy)  is  cancelled  from  date  hereof,  leav- 
ing in  force  $ covering  as  before  (or  cover- 
ing on  said  item)  '\ 

In  all  cases  of  partial  cancellation  the  endorsement  should 
be  signed  by  the  insured  in  duplicate,  one  copy  being  attached 
to  the  policy  and  one  forwarded  to  the  company.  This  is  to 
avoid  any  question  in  case  of  loss,  for  the  endorsement  might 
in  some  way  become  detached  from  the  policy,  the  insured 
or  agent  not  recall  that  reduction  of  amount  had  been  made, 
leaving  it  difficult  if  not  impossible  for  the  company  to  prove 
the  transaction. 

Reinstatement  of  Loss.  The  term  ** Reinstate  the  policy*' 
means  to  reinstate  the  amount  of  loss  that  has  been  paid 
thereunder  and  make  the  policy  again  cover  for  the  original 
amount.  This  is  customarily  done  in  the  case  of  small  losses, 
and  the  following  form  of  endorsement  may  be  used: 

''In  consideration  of  $ additional  premium, 

loss  amounting  to  $ by  fire  of  (date)  is  hereby 

reinstated,  and  policy  is  continued  for  the  full  amount, 
Viz.,  $ '' 

Mortgage  Claim  Satisfied.  When  a  mortgage  has  been  paid 
off,  and  policy  is  to  be  made  payable  to  the  insured,  or  to  a 


64  THE   AGENTS   KEY  TO   FIRE   INSURANCE 

new  mortgagee,  the  endorsement  should  read  somewhat  as  fol- 
lows: 

^* Interest  of mortgagee  having  ceased,   (or, 

mortgage  interest  of having  been  satisfied)  loss, 

if  any,  under  this  policy  shall  hereafter  be  payable  to 
the  insured,*'  (or  ** payable  to mortgagee.") 

Foreclosure  and  Notice  of  Sale.  When  mortgage  is — or 
about  to  be — foreclosed,  the  following  or  similar  endorsement 
should  be  made  on  the  policies  of  insurance: 

^'Consent  is  hereby  given  for  foreclosure  proceedings 
to  be  commenced  on  the  within  described  property  or 
notice  given  of  sale  thereof  by  virtue  of  mortgage  or 
trust  deed." 

Certificates  and  Duplicate  Policies.  When  the  mortgagee, 
as  is  customary,  holds  the  policy,  the  insured  will  frequently 
desire  a  Certificate  of  Insurance,  or,  in  some  cases,  a  dupli- 
cate policy.  Most  companies  furnish  blank  certificates,  the 
following  being  a  sample : 

No 

Amount  $ Rate .  i Premium  $ 

This  Certifies,  That  Policy  numbered  as  above  has  been 
issued,  for  a  stipulated  consideration  of 

Dollars  Premium 

Insuring   

for  the  term  of 

from   the day  of 19 at  noon 

to  the  day  of 19 at  noon 

against  all  direct  loss  or  damage  by  fire,  except  as  therein 
provided,  to  an  amount  not  exceeding 

Dollars, 

to  the  following  described  property  while  located  and  con- 
tained as  described,  and  not  elsewhere,  to-wit; 

Loss,  if  any,  payable  to Mortgagee. 

This  Certificate  is  issued  with  the  understanding  that  it  is 
only  a  Copy  of  the  Policy  named  herein,  and  is  subject  to  all 
clauses,  riders,  amendments,  endorsements  and  assignments 


WRITING    POLICIES    AND    ENDORSEMENTS  65 

that  may  be  made  on  said  Policy,  and  in  case  of  cancellation 
of  Policy  this  Certificate  will  immediately  become  null  and 
void. 

Agent. 

Where  a  duplicate  policy  is  issued  a  blank  policy  may  be 
taken  out  of  the  regular  series  and  written  up  in  identical 
form  with  the  original.  It  should  have  stamped  or  written 
across  its  face  the  word  DUPLICATE,  together  with  the  fol- 
lowing or  similar  condition: 

DUPLICATE. 

**This  Duplicate  is  issued  with  the  understanding  that 
it  is  only  a  copy  of  the  ORIGINAL,  and  subject  to  all 
endorsements  and  assignments  that  may  be  made  on  said 
original  and  in  case  of  cancellation  thereof  this  dupli- 
cate will  immediately  become  null  and  void." 

When  a  duplicate  policy  is  issued,  a  daily  report  should  be 
sent   to    the    company,   marked    "Duplicate    of    Policy    No. 

,''  and  duly  recorded  as  such  in  the  agent's  records 

and  in  the  company's  monthly  account. 


CHAPTER  VII 

LOSSES 

What  to  Do— What  to  Avoid  Doing — Advice  to  In- 
sured— Adjustment  by  Agent — Proofs  of  Loss — 
Receipts  for  Loss  Paid — Payment  of  Losses — Ap- 
praisal Agreement  —  Non-Waiver  Agreement- 
Subrogation  Receipt. 

When  a  loss  occurs  the  agent  is  often  in  doubt  what  to  do, 
or  avoid  doing,  in  order  to  properly  conserve  the  interests  of 
both  parties,  namely,  the  insured  and  the  corn- 
Agent's  pany;  yet,  in  large  measure,  he  must  be  guided 
Duty  by  his  own  good  judgment  based  on  the  particu- 
lar circumstances  surrounding  each  claim 
Certain  things,  however,  are  always  expected  of  the  agent: 

**He  should  give  proper  notice  to  the  company  (or 
companies)  interested,  and  to  its  iield  men,  if  any,  (see 
Reporting  Losses) ; 

**He  should  avoid  making  any  endorsement  or  correc- 
tion or  change  of  any  kind  on  a  policy  after  a  fire  has  oc- 
curred, or  accepting  any  premium  or  additional  premium. 
The  reason  for  this  is  to  avoid  taking  action  that  might 
waive  some  violation  of  the  conditions  of  the  policy  or 
reinstate  a  policy  that  is  void; 

*|If  binder  has  been  given  and  fire  occurs  before  the 
policy  is  issued,  it  is  usually  better  to  report  the  facts  to 
the  company  and  let  it  direct  what  further  action  shall 
be  taken.'' 

Advice  to  the  insured  after  a  fire  should  usually  be  confined 
to  pointing  out  the  conditions  of  the  policy  as  set  forth  there- 
in.    It  is  the  first  duty  of  the  insured,  after 
Giving  notice  of  fire  has  been  sent  to  the  company, 

Advice  to  handle  the  damaged  property  in  a  way  to 

prevent  further  loss,  and  this  may  be  explained 
to  the  insured  and  advice  given  as  to  the  best  means  to  em- 
ploy. Within  reasonable  limits,  expenditures  undertaken  foi 
protecting  the  property  from  further  damage  become  a  propei 

66 


LOSSES  67 

charge  against  the  loss  and  may  be  included  in  the  claim; 
such  as,  for  example,  covering  a  hole  in  the  roof,  handling 
wet  stock,  greasing  machinery,  etc. :  But  expenditures  neces- 
sary in  order  that  the  insured  may  be  in  position  to  present  a 
claim  are  not  properly  chargeable  to  the  loss;  such  as,  mak- 
ing the  inventory,  preparing  statements,  etc. 

There  are  so  many  different  conditions  which  may  arise 
that  it  seems  impracticable  to  give  any  definite  directions 
how  to  protect  property  from  further  damage.  Good  sense 
must  largely  govern.  Buildings  with  holes  in  roof  or  walls 
should  be  protected  from  the  elements,  and  it  is  usually  better 
not  to  dry  out  a  building  by  artificial  heat,  except  of  very 
low  degree.  Machinery  that  is  wet  should  be  greased,  using 
what  machinists  call  ** slush.''  Stock  should  be  dried;  usu- 
ally, air  drying  is  preferable  and  an  excessive  degree  of  heat 
is  almost  always  harmful.  Often  the  advice  of  someone  in 
the  same  line  of  business  will  be  valuable,  and  perhaps  the 
very  best  guide  is  for  the  insured  to  consider,  '^What  would 
I  do  if  I  had  no  insurance. ' ' 

The  company  or  its  field  man  is  very  likely  to  refer  small 
losses  to  the  agent  for  adjustment,  in  which  case  it  will  be 

expected  that  he  will  deal  fairly  with  both  in- 
Adjustment  sured  and  company,  fixing  the  amount  of  loss 
by  Agent  on  the  basis  of  indemnity  only,  but  allowing  the 

insured  all  to  which  he  is  entitled.  (See  Cash 
Value.) 

It  seems  proper  to  say  that  while  the  companies  naturally 
desire  to  keep  their  losses  down  as  much  as  they  can  legiti- 
mately, the  time  has  long  since  passed  when  reputable  com- 
panies wish  to  have  their  losses  settled  for  as  little  as  pos- 
sible regardless  of  equity;  and  the  company  that  permits  its 
representatives  to  browbeat  and  mulct  the  insured  very  soon 
gains  an  unenviable  reputation,  both  among  agents  and  brok- 
ers, and  among  other  companies — to  say  nothing  of  that  part 
of  the  public  with  whom  it  comes  in  contact  loss-wise. 

In  adjusting  a  loss  all  the  policies  covering  on  property  in- 
volved should  be  examined  and  tabulated,  showing  the  amount 
of  each  and  the  items  (if  more  than  one)  under  which  claim 
for  loss  is  made:  they  should  be  carefully  compared  to  see 
whether  they  are  concurrent,  and  read  in  detail  to  see  whether 
the  property  is  covered  for  which  claim  is  made. 


68  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

Inquiry  should  be  made  and  all  evidence  examined  to  de- 
termine, if  possible,  the  cause  of  fire;  and,  if  this  cannot  be 
definitely  established,  then  the  most  likely  cause  should  be 
given,  with  suitable  explanation. 

The  adjustment  should  determine  sound  value  of  both  the 
damaged  and  the  undamaged  property,  as  well  as  the  loss, 
and  if  there  is  a  coinsurance  clause  attached  (insurance  being 
insufficient  to  comply  therewith)  the  apportionment  should 
show  the  portion  of  the  loss  borne  by  the  insured  in  accord- 
ance with  such  coinsurance  clause. 

If  the  agent  is  not  certain  that  the  company  is  liable,  or 
if  there  are  any  doubts  in  his  mind  about  the  honesty  of  the 
origin  of  the  fire,  or  the  claim  for  loss,  and  he  cannot  resolve 
such  doubts,  he  will  naturally  refer  same  to  the  company, 
with  a  full  statement  of  facts,  and  ask  instructions. 

In  the  settlement  of  every  loss  the  papers  required  by  the 
company  are:  Proof  of  Loss,  Report  of  Loss  (for  statistical 

purposes)  and,  in  certain  cases.  Receipt  for 
Required  Payment.    When  the  sound  value  and  the  loss 

Papers  are  agreed  upon,  the  agent  usually  makes  out 

the  Proof  of  Loss,  has  the  insured  sign  and 
swear  to  it,  and  forwards  it  to  the  company  or  field  man, 
draft  in  payment  being  forwarded  to  the  agent  in  due 
course  for  delivery  to  the  insured.  The  policy  provides 
that  payment  shall  be  made  within  60  days  after  proof 
is  received  by  the  company,  but  small  losses  are  usually  paid 
without  delay.  For  the  reason  that  loss  need  not  be  paid 
until  60  days  have  elapsed,  it  was  for  many  years  the  custom 
to  take  off  1%  discount  if  loss  was  paid  at  once,  and  this 
custom  still  prevails  in  some  sections,  although  it  has  quite 
largely  been  abandoned,  and  companies  generally  are  now 
promptly  paying  all  losses,  large  or  small,  without  discount. 

The  short  form  Proof  of  Loss  is  used  where  the  whole  loss 
is  $100  or  less;   otherwise,  the  long  form.     Sometimes  the 

agent  pays  with  his  own  check  the  small  losses 
Proofs  which  he  adjusts,  and  charges  the  loss  to  the 

of  Loss  company  in  his  next  account,  or  deducts  the 

amount  from  his  next  remittance.  The  Proof 
of  Loss  need  be  signed  only  by  the  insured,  but  checks  in  pay- 
ment of  a  loss  should  be  made  payable  to  all  parties  men- 
tioned in  the  policy;  that  is,  the  insured,  and  all  the  mort- 
gagees or  trustees,  if  any,  or  the  payee  under  a  loss  payable 
clause ;  when  the  pgent  pays  the  loss  a  receipt,  likewise  signed, 


LOSSES  69 

should  always  be  secured  and  forwarded  to  the  company  for 
its  voucher.  The  policy  unless  cancelled  by  loss  or  when  loss 
is  paid,  should  always  be  endorsed  with  the  payment  of  the 
loss,  a  convenient  form  being  as  follows: 

**Fire...(4.a.te)...;  Loss  $ ;  Paid.(datel; item 

involved;   Amount  of  policy  or  items  reduced  accord- 
ingly." 

Some  companies  require  a  receipt  signed  in  duplicate  by 
the  insured,  one  going  to  the  company  and  one  being  attached 
to  the  policy.  Other  companies  forward  a  receipt  with  draft 
in  payment  of  loss  and  require  it  to  be  signed  on  delivery  of 
draft  and  attached  to  policy. 

All  the  information  called  for  on  proofs  of  loss  should  be 
given,  including  a  detailed  statement  of  the  property  dam- 
aged or  destroyed. 

When  loss  is  submitted  to  appraisal  as  provided  in  the 
policy,  it  is  the  custom  for  an  appraisal  agreement  to  be  exe- 
cuted between  the  insured  and  the  company  or 
Appraisal  companies  interested.  This  should  be  signed, 
in  duplicate,  by  the  insured  and  all  the  com- 
panies interested,  one  copy  being  for  use  by  the  appraiser 
named  by  the  insured  and  the  other  for  use  by  the  appraiser 
named  by  the  company  or  companies. 

FORM  OF  APPRAISAL  AGREEMENT 

(For  use  under  Old  New  York  Standard  Policy) 

IT  IS  HEREBY  stipulated  and  agreed  by  and  between 

John  and  Richard  Roe 

of  the  first  part,  and 

Example  Insurance  Company  of  Hartford 

Victor  Insurance  Company  of  New  York 


each  acting  for  itself  and  not  as  agent  for  the  other,  and 

each  as  party  of  the  second  part,  that 

Henry  Jones ,  designated  by  the  parties  of  the 

first   part,   and 

Thomas  Smith ,  designated  by  the  parties  of 

second  part,  shall  ascertain,  pursuant  to  the  terms  and  con- 


70  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

ditions  of  the  policies  of  insurance  issued  by  said  companies 
to  the  party  of  the  first  part,  the  sound  actual  cash  value 
of  the  property  of  said  party  of  the  first  part,  on  the  4th 
day  of . . .  .May. . . .,  1916,  which  is  more  particularly  de- 
scribed in  the  policies  as 

(Attach  copy  of  form) 


as  well  as  the  actual  direct  loss  or  damage  caused  thereto  by 
a  fire  which  occurred  on  that  day;  that  the  said  two  ap- 
praisers shall  first  select  a  competent  and  disinterested  per- 
son who  shall  act  as  umpire,  and  the  said  two  appraisers 
together  shall  then  estimate  and  appraise  the  loss,  stating 
separately  sound  value  and  damage,  and  failing  to  agree 
shall  submit  their  differences  to  the  said  umpire;  and  the 
award,  in  writing,  of  any  two  shall  determine  the  amount 
of  such  loss.  Such  loss  or  damage  shall  be  ascertained  or 
estimated  according  to  the  actual  cash  value  of  said  property 
at  the  time  of  the  occurrence  of  said  fire,  with  proper  de- 
duction for  depreciation  however  caused,  and  shall  in  no 
event  exceed  what  it  would  then  cost  the  insured  to  repair  or , 
replace  the  same  with  material  of  like  kind  and  quality,  but 
such  appraisement  does  not  in  any  respect  waive  any  of 
the  provisions  or  conditions  of  said  policies  of  insurance,  or 
any  forfeiture  thereof,  or  the  proof  of  such  loss  and  damage 

required  by  the  polic of  insurance  thereon. 

New  York, May  7, 1916. 


.  John  &  Richard  Roe, 

. ....  by  John  Roe 

.Example  Insurance  Company,, 
by  E.  R.  Loe, 

Special   Agent. . . . 

,  Victor  Insurance  Company, . .  . 
by  H.  P.  Moe, 

State  Agent 


LOSSES  71 

APPRAISAL  AGREEMENT 

(For  use  under  New  New  York  Standard  Policy) 

IT  IS   HEREBY  stipulated  and  agreed  by  and  between 

John  and  Richard  Roe 

of  the  first  part,  and 

Example  Insurance  Co.  of  Hartford 

Victor  Insurance  Co.  of  New  York 


each  acting  for  itself  and  not  as  agent  for  the  other,  and 

each  as  party  of  the  second  part,  that 

Henry  Jones ,  designated  by  the  part .... 

of  the  first  part,  and 

Thomas  Smith ,  designated  by  the  part .... 

of  the  second  part,  shall  ascertain,  pursuant  to  the  terms  and 
conditions    of    the    polic ....  of    insurance    issued    by    said 

comp to  the  party  of  the  first  part,  the  sound  actual  cash 

value  of  the  property  of  said  party  of  the  first  part,  on 
the. . .  .day  of ,  192. . .,  which  is  more  particu- 
larly described  in  the  policies  as 

(Attach   copy  of  form) 


as  well  as  the  actual  direct  loss  and  damage  caused  thereto 
by  a  fire  which  occurred  on  that  day  and/or,  if  this  agree- 
ment contemplates  personal  property,  in  such  case  damage 
if  any  caused  by  removal  from  premises  endangered  by 
fire;  that  the  said  two  appraisers  shall  first  select  a  com- 
petent and  disinterested  person  who  shall  act  as  umpire,  and 
the  said  two  appraisers  together  shall  then  estimate  and 
appraise  the  loss,  stating  separately  sound  value  and  damage 


72  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

to  each  item,  and  failing  to  agree,  shall  submit  their  differ- 
ences only,  to  the  umpire.  An  award,  in  writing,  so  item- 
ized, of  any  two  when  filed  with  the  insurance  companies 
above  designated  shall  determine  the  amount  of  sound  value 
and  of  loss  or  damage.  Such  loss  or  damage  shall  be  ascer- 
tained according  to  the  actual  cash  value  of  said  property  at 
the  time  of  the  occurrence  of  said  fire,  with  proper  deduc- 
tions for  depreciation  however  caused,  and  shall  in  no  event 
exceed  what  it  would  cost  to  repair  or  replace  the  same  with 
material  of  like  kind  and  quality  within  a  reasonable  time 
after  such  loss  or  damage,  without  allowances  for  any  in- 
creased cost  of  repair  or  reconstruction  by  reason  of  any 
ordinance  or  law  regulating  construction  or  repair  and  with- 
out compensation  for  loss  resulting  from  interruption  of 
business  or  manufacture,  but  such  appraisement  does  not 
in  any  respect  waive  any  of  the  provisions  or  conditions 
of  said  policy  or  policies  of  insurance,  or  any  forfeiture 
thereof,  or  the  proof  of  such  loss  and  damage  required  by 
the  policy  or  policies  of  insurance  thereon. 

Each  appraiser  shall  be  paid  by  the  party  selecting  him 
and  the  expenses  of  appraisal  and  umpire  shall  be  paid  by 
the  parties  equally. 

The  reverse  side  of  the  appraisal  agreement  blank  provides 
as  follows: 

APPOINTMENT  OF  A  THIRD  PERSON 

We,  the  undersigned,  do  hereby  appoint 

as  umpire,  as  provided  for  in  the  within  Agreement. 
192... 


Appraisers. 
DECLARATION 


State  of / 

\   ss. 
County   of ' 

We,  the  undersigned,  do  solemnly  swear  that  we  are  not 
interested,  either  directly  or  indirectly,  as  partners,  creditors. 


LOSSES  73 

or  otherwise,  or  related  to  either  of  the  parties  of  the  fore- 
going agreement;  that  we  will  act  with  strict  impartiality  in 
making  an  appraisement  agreeably  to  the  foregoing  appoint- 
ment, according  to  the  best  of  our  knowledge,  skill  and 
judgment. 

WITNESS  our  hands  this day  of 

A.  D.,  192.... 


Appraisers. 
Umpire. 


Sworn  to  before  me  by  said 

and  subscribed  by in  my  presence,  this. 

day  of ...A.  D.  192.... 


AWARD 

We,  the  undersigned,  pursuant  to  the  within  appointment, 
do  hereby  certify  that  we  have  truly  and  conscientiously 
performed  the  duties  assigned  us,  agreeably  to  the  foregoing 
stipulations,  and  have  appraised  and  determined  the  actual 

cash  value  of  said  property  on  the day  of 192. ., 

and  the  actual  direct  loss  and  damage  thereto  by  the  fire 
on  that  day,  to  be  as  follows,  to  wit: 

Actual  Net  Cash  Value 

Actual  Direct  Loss  and  Damage 

WITNESS  our  hands,  this day  of 192. . 


Appraisers. 
Umpire. 


74  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

When  there  is  question  as  to  the  liability  of  the  company 
under  a  policy,  but  it  is  desired  to  fix  the  amount  of  sound 

value  and  loss,  leaving  the  question  of  liability 
Non-waiver  for  determination  later,  it  is  the  custom  for  a 
Agreement       non-waiver  agreement  to  be  executed  between 

the  insured  and  the  company  interested.  This 
is  intended  to  have  the  effect  of  relieving  the  company  from 
any  acknowledgment  of  liability,  or  waiver  of  violation  of 
any  of  the  conditions  of  the  policy.  Generally  speaking,  any 
act  by  a  company  or  its  representative  looking  toward  the 
actual  adjustment  of  a  claim  for  loss,  taken  after  knowledge 
of  a  violation  of  some  policy  condition,  or  a  fraud,  may  be 
construed  as  a  waiver  thereof  unless  a  non-waiver  agreement 
has  been  executed. 

FORM  OF  NON-WAIVER  AGREEMENT 

It  is  hereby  mutually  understood  and  agreed  by  and  between 

John  and  Richard  Roe 

of  the  first  part  and  the Example  Insurance  Company. ... 

of Hartford and    other    Companies    signing    this 

agreement,  parties  of  the  second  part,  that  any  action  taken 
by  said  parties  of  the  second  part  in  investigating  the  cause 
of  fire  or  investigating  and  ascertaining  the  amount  of  loss 
and  damage  to  the  property  of  the  parties  of  the  first  part 

caused  by  fire  alleged  to  have  occurred  on May  4th 

shall  not  waive  or  invalidate  any  of  the  conditions  of  the 
policies  of  the  parties  of  the  second  part,  held  by  the  parties 
of  the  first  part,  and  shall  not  waive  or  invalidate  any  rights 
whatever  of  either  of  the  parties  to  this  agreement. 

The  intent  of  this  agreement  is  to  preserve  the  rights  of 
all  parties  hereto  and  provide  for  an  investigation  of  the  fire 
and  the  determination  of  the  amount  of  the  loss  or  damage, 
without  regard  to  the  liability  of  the  parties  of  the  second 
part. 

Signed  in  duplicate,  this   ..7th.. day  of May 1916. 

John  &  Richard  Roe, 

by  John  Roe 

Example  Insurance  Co., 

by  E.  R.  Loe, 

Special   Agent. . . . 

Victor  Insurance  Co., 

by  H.  P.  Moe, 

State  Agent 


LOSSES  iO 

NON-WAIVER  AaREEMENT 

(In  use   in  New  York  City   (1922)) 

Whereas,  an  early  ascertainment  of  the  amount  of  both 
Sound  Value  and  Loss  or  Damage,  if  any,  is  desired  by 
both  parties  to  this  agreement: 

It    is    hereby    mutually    understood    and    agreed    by    and 

between par 

of  the  first  part  and  the of 

and    other   Insurance    Companies    signing    this 

agreement,  or  assenting  hereto,  part of  the  second  part, 

that  this  agreement  and/or  any  action  taken  by  said  part 

of  the  second  parf  in  investigating  the  cause  of  fire  and/or 
investigating  and  ascertaining  by  appraisement  or  otherwise 
the  sound  value  of  and  the  amount  of  loss  and  damage  to 
the    property,    described    in    the   policies    of    the    said    fire 

Insurance  Companies,   situated 

caused  by  fire  alleged  to  have  occurred  on 

shall  not  waive  or  invalidate  any  of  the  conditions  of  the 
polic of  the  part of  the  second  part,  or  any  for- 
feiture thereof,  and  shall  not  waive  or  invalidate  any  rights 
whatsoever  of  either  of  the  parties  to  this  agreement. 

The  intent  of  this  agreement  is  to  preserve  the  rights  of 
all  parties  hereto  and  provide  for  an  investigation  of  the 
fire  and  the  determination  of  the  sound  value  and  the  amount 
of  the  loss  or  damage,  without  regard  to  the  liability  of  the 
part of  the  second  part. 

Signed  in  duplicate,  this day  of 19. . . 


Subrogation  Receipt.  When  the  insurance  company  is  to 
be  subrogated  to  any  rights  or  claims  the  insured  may  have 
against  a  third  party,  the  following  form  of  receipt  maj^  be 
executed  by  the  insured: 


76  THE  AGENTS  KEY  TO  FIRE  INSURANCE 

SUBROGATION  RECEIPT. 

$ Received  of  the  Example  Insurance  Co.,  by  the 

hands  of . . .  .John  R.  Jones. . .  .Agent. . .  .Rochester,  N.  Y.. . 

the  sum  of. . .  .Two  Thousand  ($2,000) Dollars, 

being  in  full  of  all  claims  and  demands  for  loss  and  damage 

by  fire  on   the 4th day   of May 1916, 

to  the  property  insured  by  Policy  No 322,496. .  .issued  at 

the  . . .  .Rochester,  N.  Y Agency  of  said  Company. 

And  in  consideration  of  such  payment  the  undersigned 
hereby  assigns  and  transfers  to  the  said  Company  each  and 
all  claims  and  demands  against  any  person,  persons  or  prop- 
erty, arising  from  or  connected  with  such  loss  or  damage, 
(and  the  said  Company  is  subrogated  in  the  place  of  and 
to  the  claims  and  demands  of  the  undersigned  against  said 
person,  persons  or  property  in  the  premises,)  to  the  extent 
of  the  amount  above  named. 

Dated  this 7th day  of May 1916,  at 

Rochester,  N.  Y 

(Signed) John  &  Richard  Roe,. . . . 

by  John  Roe. 

ANOTHER  FORM  OF  SUBROGATION  RECEIPT 

Received    of    the    Victor    Insurance    Co.     the    sum    of 

Dollars, 

being  in  full  of  all  claims  and  demands  for  loss  and  damage 
by  fire,  collision  or  other  casualty,  occurring  on  or  about 

the day  of ,  192. . .  to  the  property 

described  and  insured  by  Policy  No issued  at 

Agency  of  said  Company ; 

and  in  consideration  of  such  payment  the  undersigned  hereby 
assigns  and  transfers  to  said  Company  each  and  all  claims 
and  demands  against  any  person,  persons  or  property  arising 
from  or  connected  with  such  loss  or  damage,  and  the  said 
Company  is  hereby  subrogated  in  the  place  of  and  to  the 
claims  and  demands  of  the  undersigned  against  said  person, 
persons  or  property  in  the  premises  to  the  extent  of  the 
amount  of  said  payment,  which  right  of  subrogation  shall 


LOSSES  77 

be  prior  to  any  right  of  the  undersigned;  and  the  under- 
signed hereby  agrees  that  said  Company  may  bring  suit  in 
the  name  of  the  undersigned  but  to  the  sole  benefit  of  said 
Companj^,  and  may  compromise  any  such  claims  and  receive 
any  payment  deemed  expedient  by  it  in  full  settlement  of 
all  claims  and  demands  of  any  persons,  firm  or  corporation 
against  any  person,  persons  or  property  without  right  of 
intervention  or  objection  by  the  undersigned;  and  the  under- 
signed further  agrees  to  execute  upon  request  of  said  Com- 
pany any  and  all  forms  of  release,  discharge  and  agreement 
of  settlement  deemed  necessary  or  expedient  by  the  said 
Company,  without  interest  or  right  on  the  part  of  under- 
signed unless  the  amount  to  be  received  as  consideration 
for  said  releases  shall  exceed  the  amount  of  the  above  pay- 
ment with  all  expenses  and  costs  to  which  the  Company 
may  be  put  in  recovering  the  same,  and  in  such  case  the 
interest  of  the  undersigned  shall  be  only  to  the  amount 
of  such  excess;  it  being  understood  and  agreed  that  the 
undersigned  is  to  be  saved  harmless  from  any  expense  in 
connection  with  the  prosecution  of  such  claim  or  suit,  except 
in  case  a  counter-claim  is  filed  and  recovery  had  on 
said  counter-claim,  in  which  event  the  undersigned  agrees 
to  pay  said  counter-claim  without  liability  on  the  part  of 
said  Company. 

Dated  and  duly  executed  by  the  undersigned  this 

•lav  of A.  D.  19.... 


APPORTIONMENTS  (NONCURRENT  INSURANCE) 

Apportionment  of  insurance  which  is  not  concurrent  is 
one  of  the  most  vexing  and  troublesome  questions  with  which 
adjusters  have  to  deal,  and  one  reason  therefor  lies  in  the 
fact  that  no  rule  or  rules  have  been  established  either  by 
law  or  custom  under  which  such  apportionments  may  be 
made  without  fear  of  challenge.  The  difficulties  arising  in 
cases  of  nonconcurrence  are  so  clearly  recognized  that  a 
number  of  the  states  permit  on  the  file  page  of  the  standard 
policy  a  memorandum  reading  as  follows:  ^*It  is  important 
that  the  written  portions  of  all  policies  covering  the  same 
property  read  exactly  alike.  If  they  do  not,  they  should  be 
made  uniform  at  once." 

Many  so-called   ''rules"   have  been   originated,   each  in- 


78  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

tended  to  solve  some  specific  problem  of  nonconcurrence  and 
subsequently  invoked  as  a  precedent,  so  that  there  exist 
today  a  number  of  such  rules,  all  having  real  or  fancied 
merit,  by  which  the  adjuster  may  be  guided  as  the  case  may 
seem  to  warrant,  unless  he  leaves  all  beaten  paths  and  blazes 
a  new  trail;  these  are  set  forth  in  following  pages  with 
examples  showing  their  application. 

There  are  two  legal  maxims  which  the  adjuster  will  bear 
in  mind  in  making  an  apportionment  of  nonconcurrent  in- 
surance— nan],ely,  (a)  any  ambiguity  in  the  terms  of  a  con- 
tract shall  be  construed  against  the  party  thereto  responsible 
for  its  phraseology,  (b)  Apportionments  of  nonconcurrent 
insurance  shall  be  made  in  the  manner  most  favorable  to 
the  policyholder. 

Nonconcurrent  insurance  may  be  divided  into  two  general 
groups,  namely,  simple  nonconcurrence  and  double  or  com- 
pound nonconcurrence. 

Simple  Nonconcurrence 

The  term  *' simple  nonconcurrence"  covers  those  cases 
which  come  within  the  following  classes: 

Where  loss  occurs  on  a  property  covered  by  specific  in- 
surance and  by  blanket  insurance  which  covers  other  property 
as  well,  there  being  no  loss  on  the  property  covered  only 
by  the  blanket  insurance.  The  rule  in  such  case  is  that  the 
face  amount  of  such  blanket  insurance  must  contribute  with 
such  specific  insurance  to  pay  the  loss.  This  is  known  as  the 
''Page  vs.  Sun"  rule. 

EXAMPLE 
Value  Lioss  Insurance 

A  $100  (X)   1000 1       2000  (y) 


X 


$3000 
Ins.     •  ^I^<>«« 

$1000  (specific    on    A)  $33.33 


y  2000  (blanket  on  A  and  B)  66.67  j 

3000  $100.00  ; 

Where  loss  occurs  on  a  property  covered  by  a  single  item  ; 

of  specific  insurance  and  as  well  by  blanket  insurance  which  ; 

covers    in   addition   other   property   on   which    there    is    no  : 

specific  insurance,, there  being  a  loss  also  on  the  property  ! 

covered  only  by  the  blanket  insurance.     The  rule  in  such  | 

case  is  that  the  loss  on  the  property  covered  only  by  the  \ 


LOSSES 


79 


blanket  insurance  is  first  apportioned  to  that  insurance  and 
the  remainder  of  such  blanket  insurance  then  contributes 
with  the  specific  insurance  to  pay  the  loss  which  both  policies 
cover.     This  is  known  as  the  Cromie  rule. 


(y) 

(X) 


Value 


(Blanket  on  A  and  B) 
(Specific  on  A) 


EXAMPLE 

$100 
500 


$600 

Ins. 

2000 


L.08S 

500 


Inwurant'e 

(x)   1000 


Ins. 

1500 
1000 


L.088 

60. 
40. 


(y)  2000 


2500      100. 


$3000 

Total 
Ins.      Loss 

2000        560 
1000  40 

3000        600 


Double  Nonconcurrence 

The  tenn  ** double"  or  *' compound  nonconcurrence"  is 
intended  to  include  those  cases  where  each  of  two  or  more 
items  or  classes  of  property  is  covered  by  specific  insurance 
and  such  property  is  also  within  the  cover  of  blanket  insur- 
ance. There  is  no  generally  accepted  rule  for  the  apportion- 
ment of  such  nonconcurrences.  The  following  rules  are  in 
use: 

The  Reading  Rule.  The  blanket  policy  is  divided  among 
the  several  items  of  property  in  the  ratio  of  their  respective 
values. 

EXAMPLE 


Value 

1000 
1000 
2000 

4000 


Ins.  Loss 

1000  66.07 


Loss 

100. 
500. 

600. 

B 

Ins.         Loss 


Insurance 


4000 

c 


500 
1500 


33.33 
100.00 


1000 
500 


333.33 
166.67 


Ins. 


1000 


1500        500.00 


1000 


Less 


nil 


Total 
Ins.  Loss 

1000  66.67 


1000 
2000 


4000 


336.33 
200.00 


600.00 


Modified  Reading  Rule.  (A)  The  blanket  policy  is  divided 
among  the  several  items  of  insurance  involved  in  loss  in 
the  ratio  of  their  respective  values. 


80 


THE  AGENTS   KEY  TO  FIRE  INSURANCE 


A 
B 

C 

Ins. 

1000 

1000 

Value 

1000 
1000 
2000 

4000 
A 

Loss 

50. 

50.* 

EXAMP 
Loss 

100. 
500. 

600. 

Ins. 

1000 
1000 

LE 

X 

y 

Insurance 

1000    \     2000     z 

X 

y 
z 

B 

4000 

Total 

Loss                Ins.               L.088 

1000                  50. 

250.                1000                250. 

250.                2000                300. 

2000 


100. 


2000 


500. 


4000 


600. 


Modified  Reading  Rule.  (B)  The  blanket  policy  is  divided 
among  all  classes  of  property  whether  involved  in  loss  or 
not  so  that  as  nearly  as  possible  the  ratio  of  insurance  to 
value  will  be  the  same  on  each  class  as  on  all  together. 


Value 

A  3000 
B  3000 
C        4000 


10000 


EXAMPLE 
Lross  Insurance 

100  w  1000 

500  X  1000      }■    2000 

400  y  1000 

1000 


Ins.    Loss 
1000    66.67 


B 

Ins.    Loss 


5000 

c 


500 
1500 


33.33 
100.00 


1000 
500 


333.33 
166.67 


1500    500.00 


Ins. 


1000 
1000 


2000 


Loss 


200 
200 


400 


Total 
Ins.    Loss 

1000  66.67 
1000  333.33 
1000  200.00 
2000    400.00 


5000   1000.00 


The  Albany  Rule.  Each  item  of  specific  insurance  is  given 
contribution  from  the  face  amount  of  the  blanket  policy. 
(This  rule  seems  to  be  out  of  use,  as  it  should  be.) 


EXAMPLE 


A 
B 

c 

Ins. 

1000 

2000 

Value 

1000 
1000 
2000 

4000 

A 

Loss   • 
33.33 

66.67 

Loss 
100. 

500. 

600. 

Ins. 

1000 
2000 

B 

X 

y 

Insurance 

1000     ) 

1000    y     2000    z 

X 

y 

z 

4000 

Loss 

166.67 
333.33 

Total 
Ins.                 Loss 
1000                33.33 
1000              166.67 
2000              400.00 

3000 


100.00 


8000 


500.00 


4000 


600.00 


The  Finn,  Qriswold  or  Kinne  Rule.  The  blanket  policy  j 
is  divided  among  the  classes  of  property  in  the  ratio  of  the  \ 
respective  losses. 


LOSSES 


81 


EXAMPLE 


Value 

Loss 

Insurance 

A         1000 
B         1000 
C        2000 

100 
500 
400 

1000 

X      1{M)0      ) 
y     1000     y   z 
w     1000     ) 

2000 

4000 

5000 

Ins. 

A 

I.088 

Ins. 

B 

Loss 

Ins. 

c 

Loss 

Total 
Ins.          Loss 

X 

y 

w 
z 

1000 
200 

83.33_ 
16.67 

1000 
1000 

250.00 
250.00 

1000 
800 

222.22 

177.78 

400.00 

1000 
1000 
1000 
2000 

83.63 
250.00 
222.22 
444.45 

1200 

100.00 

2000 

500.00 

1800 

5000 

1000.00 

G-radual  Reduction  Rule.  The  blanket  policy  contributes 
first  on  its  face  amount  with  the  insurance  covering  spe- 
cifically on  the  item  where  the  loss  is  greatest.  Its  re- 
mainder then  contributes  with  the  insurance  on  the  item 
where  the  next  greatest  loss  occurs,  and  so  on  until  the 
loss  on  all  items  is  apportioned  or  the  blanket  insurance  is 
exhausted. 

NOTE:  Many  of  the  men  who  have  studied  this  question 
object  to  this  rule  because  the  blanket  insurance  contributes 
in  the  aggregate  on  an  amount  of  insurance  frequently  much 
in  excess  of  the  amount  of  insurance  for  which  the  com- 
pany received  premium,  and  because  it  assigns  a  wholly 
disproportionate  amount  of  loss  to  the  blanket  policy,  which 
is  often  most  nearly  correct  in  form  of  all  the  policies  on 
the  risk.  Furthermore,  when  certain  forms  of  coinsurance 
clauses  are  on  the  policies,  it  is  the  rule  most  likely  to  be 
impossible  of  application. 


EXAMPLE 

Value 

L.OSS 

Insurance 

A 
B 

100. 
500. 

600. 

X 

y 

1000     I 

1000   S 

2000     z 

4000 

IllH. 

B 

L.OSS 

Ins. 

A 

Loss 

Total 
Ins.              L,08S 

X 

y 
Z 

1000 
2000 

166.67 
333.33 

1000.00 
1666.67 

37.50 
62.50 

1000              37.50 
1000            166.67 
2000            395.83 

3000     500.00       2666.67     100.00       4000     600.00 

The  Rice  Rule.  This  rule  is  based  on  a  division  of  the 
blanket  insurance.  The  various  steps  followed  are:  .  The 
face  amount  of  the'  blanket  insurance  is  assigned  to  each 
specific  item  of  insurance,  and  a  total  theoretical  amount  of 


82  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

insurance  for  each  specific  item  is  thus  reached.  The  loss 
on  each  item  is  subtracted  from  the  theoretical  insurance  on 
each  item,  and  a  theoretical  overinsurance  on  each  item  thus 
obtained.  The  actual  overinsurance  in  the  aggregate  is  then 
divided  in  the  proportions  of  the  theoretical  overinsurance, 
and  the  results  obtained  are  added  to  the  respective  losses. 
The  total  insurance  on  each  item  is  thus  found,  and  the 
blanket  insurance  is  divided  so  as  to  reach  those  totals.  The 
loss  is  then  apportioned. 

EXAMPLE 


Value 

Loss 

Insurance 

A 

7931.54 

4600.00 

X 

S     }    2000    z 

B 

5552.00 

4164.00 

y 

13483.54 

8764.00 

11000 

A 

B 

Total 

Less                 Actual 

Ins. 

Insurance 

Total  Loss    Overinsurance 

X 

0000 

11000 

8764                     2236 

y 

3000 

z 

2000 

2000 

Theoretical  Overinsurance 

A      3400 

8000 

5000 

B         836 

Loss 

4000 

4164 

Total      4286 

Over  Ins. 

3400 

836 

Division    of    Overinsurance 

A        3400/4236  X  2236  =  1794.71 
B  836/4236  X  2236  =     441.29 


A        4600   plus    1794.71 
B         4164   plus     441.29 

=«  6394.71 
=  4605.29 

2236.00 

Total  contributi 
«                 « 

ament 
B 

Loss 

2712.53 
1451.47 

ng  lusurnnce. 

A 

Ins.              Loss 

X      6000.00        4316.07 

z        394.71           283.93 

11000.00 
Apportioi 

Ins. 

3000.00 
1605.29 

Total 
Ins.             Pays 

6000          4316.07 
3000           2712.53 
2000          1735.40 

6394.71        4600.00  4605.29  4164.00  11000  87&4.00 

Simplified  Finn  or  Rice  Rule.  The  blanket  policy  is  so 
divided  among  all  policies  included  in  the  loss  that  when 
possible,  and  as  nearly  as  possible,  the  ratio  of  available  in- 
surance to  loss  will  be  the  same  on  each  class  as  on  all 
together. 


EXAMPLE 

Value 

Loss 

Insurance 

A 

:UMM) 

200 

w    10(M)    } 

X    1500   •     ir,oo    z 

y     2000    S 

15 

:>(K)o 

:\m 

C 

40(K) 

500 

10000  1000  6000 


LOSSES  83 


A  B                                      C                           Total 

InK.  L.OKK     liiM.    L.OSS      Ills.    L.USM     liis.     I^ukk 

w   1000  100.67                                 IfMM)    106.67 

X  1500    250                   1500    250.00 

V  2000   333.33    2000    333.33 


200    33.83     SOO     50      1000   166.67    1500    250.00 


1200    200.00    1800    300      3000  500.00    6000   1000.00 

Limit  of  Liability  Rule.  In  New  York  City  the  Commit- 
tee on  Losses  and  Adjustments  uses  what  is  known  as  the 
Limit  of  Liability  rule.    The  statement  of  this  rule  follows: 

**The  sound  value  of  and  loss  on  property  insured  by 
each  class  or  kind  of  insurance  having  been  determined,  first 
find  the  limit  of  liability  under  each  class  or  kind  of 
insurance  whether  a  single  policy,  or  group  covering  con- 
currently. If  there  is  any  average  or  coinsurance  clause 
operation  this  will  determine  the  limit  where  it  applies,  if 
not,  such  limits  will  be  determined  either  by  the  amount  of 
the  loss  or  the  amount  of  the  insurance,  whichever  is  the 
smaller. 

''Next,  add  the  limits  thus  determined.  If  the  sum  is  in 
excess  of  the  whole  adjusted  loss,  use  this  as  a  basis  for 
a  pro  rata  apportionment.  If  the  sum  of  the  limits  of  lia- 
bility is  less  than  the  whole  loss  it  is  evident  that  payment 
by  each  company  must  be  on  the  basis  of  its  maximum 
individual  limit  of  liability,  on  the  principle  that  the  greatest 
possible  collectible  loss  is  due  the  assured. 

''If  it  should  happen  that  the  insurance  (blanket  and 
specific)  on  any  certain  group  of  items  is  charged  with  a 
payment  in  excess  of  the  actual  loss  on  the  group,  it  is 
obvious  that  this  excess  over  the  actual  loss  must  be  reap- 
portioned to  the  other  insurance.  Deduct  the  excess  pro  rata 
from  one  group,  and  add  it  pro  rata  to  the  other  insurance. 
If  this  should  result  in  charging  any  group  of  insurance 
with  more  than  its  limit  of  liability,  the  excess  above  the 
limit  would  have  to  be  apportioned  a  third  time  to  any 
groups  having  unexhausted  limits  of  liability." 

EXAMPLE 


Building 

Stock 

Macliinery 

Value 

34,860.00 
8,504.95 
19,287.72 

L,088 

14,624.00 
8,504.95 
8,050.00 

Ingurance 

17,000    A    ) 
3,000     B     [ 
9,000     C     ) 

16000   / 

E 

28000 

62.652.67  31,178.95  73,000 

90%  Coinsurance  Clause  on  A,  D  and  E. 
80%  Coinsurance  Clause  on  B  and  C. 


84  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

Limit  of 
l^iability 

A         90%-  of  34860  =  31374.     17000/31374  X   14624  =       7924.01 

B        Insurance  is  limit.     Loss  total  to  insurance  3000.00 

C  80%  of  19287.72  =  15430.17.  9000/15430.17  X  8050  =  4695.35 
D  90%  of  62652.67  =  56287.41.  16000/56287.41  X  31178  =  8847.06 
B        Loss   is   limit  28000  16554.95 


41,021.67 


Limit  of 

IJability 

A 

7924.01 

B 

3000.00 

O 

4695.35 

I) 

8847.06 

E 

16554.95 

Loss 

6022.78 
2280.19 
3568.78 
6724.35 
12582.85 

41021.37  31178.95 

It  will  be  noted  that  B,  C  and  E  constitute  all  of  the 
insurance  covering  contents  and  that  the  aggregate  loss 
charged  to  those  policies  is  $18,431,82,  as  follows : 

B  2280.19 
C  3568.78 
E    12582.85 


18431.82 

The  whole  amount  of  the  stock  and  machinery  loss  as 
shown  at  the  beginning  of  this  statement  is  $16,554.95,  so 
that  the  policies  covering  stock  and  machinery  are  over- 
paying the  loss  on  that  property  by  $1,876.87,  as  follows : 

18,431.82 
16,554.95 


1,876.87 
Following  the  rule  this  amount  of  $1,876.87  is  deducted 
pro  rata  from  B,  C  and  E  and  added  pro  rata  to  A  and  D, 
as  follows: 


A 
B 
C 
D 
B 

Loss 

6022.78 
2280.19 
3568.78 
6724.35 
12582.85 

Deduct 

232.19 
363.28 

1281.40 

Add 

886.74 

990.13 

Reapportionment 

6909.52 
2048.00 
6205.50 
7714.48 
11301.45 

31178.95 

1876.87 

1876.87 

31178.95 

The  Giesse  Eule.  First  find  the  limit  of  liability  of  each 
class  of  insurance,  under  the  average  or  coinsurance  clause, 
and  find  the  total  of  those  limits  (which  will  usually  be 
somewhat  greater  than  the  aggregate  loss)  by  adding  them 
together;  then  find  what  each  class  would  pay  if  it  got  the 
full  benefit  of  its  contribution  clause,  i.  e.,  contribution  from 
the  face  or  full  amount  of  all  other  insurance  covering  the 


LOSSES 


85 


whole  or  any  part  of  the  property  which  itself  covers,  and 
find  the  total  of  these  amounts  (which  of  course  will  be  less 
than  the  aggregate  loss)  by  adding  them  together.  We  thus 
find  the  most  each  class  can  be  made  to  pay,  and  also  the 
least  it  can  possibly  get  off  for.  Add  the  several  differences 
between  these  pairs  of  limits,  find  what  proportion  of  that 
total  the  aggregate  excess  of  the  upper  limits  over  aggregate 
loss  constitutes,  and  deduct  that  proportion  of  each  of  the 
differences  from  the  respective  upper  limits,  to  find  what 
each  class  of  insurance  shall  pay  to  make  up  the  loss. 


Value 

A  8065.72 
B  3813.76 
C         1905.90 


EXAMPLE 

L.08S  Insurance 

3383.41       w  2250  ) 
3604.01  $     5250  x 

500.00       z   1750 


2750  y 


13785.38 


7487.42 


12000 


2250 


80%  of  8065.72 
5250 

80%  of  11879.48 
2750 

80%  of" 5719.66 
1750 

80%  of  1905.90 


80%    Clause 
All    Policies 

X  3383.41 


X  6987.42 


X  4104.01  = 


Average 
Clause 
Limit 

1179.79 


6860.01 


2466.50 


2250 


Contribution 
Clause 
Maximum 

X  3383.41  =  1015.03 


X  6987.42  =  3578.92 


X  4104.01  =  1157.54 


X  500  =  (573.87)    500.00 


4500 


X    500.      =    194.44 


Shortage 
Excess 


8006.30  5945.93 

Aggregate  loss    7487.42    Aggregate  loss    7487.42 


1541.49 


1541.49 

518.88 


Excess      518.88    Shortage 


Sum  of 
differences    2060.37 

Average  Clause 
Limit 

1179.79 

3860.01 

2466.50 

500.00 


$518.88  excess  of  the  aggregate  of  the  upper 
limits   over  aggregate   loss   is   25.1837%    of 
that   sum    ($2060.37). 
Contribution  Clause  Difference 

Minimum  Between  Limits 

1015.03  164.76 

3578.92  281.09 

1157.54  1308.96 

194.44  305.56 


8006.30 


Difference 

Between  Limits 

164.76 

281.09 

1308.96 

■       305.56 


5945.93 


25.1887 
25.1837 
25.1837 
25.1837 


2060.37 


Application 

of  Excess 

41.49 

70.79 

329.65 

76.95 


2060.37 


518.88 


86 


THE  AGENTS   KEY  TO   FIRE   INSURANCE 


, 

Amount  of  I.okk 

Applying  to 

Averajfe  ClaiiMti                 Hxress  to  l»e 

Ka«li  ClasH 

Limits                           Deducted 

of InHurance 

w 

1179.79                                41.49 

1138.30 

X 

3860.01                                70.79 

3789.22 

y 

2466.50                              329.65 

2136.85 

Z 

500.00                                76.95 

423.05 

Total 

8006.30                              518.88 

7487.42 

Apportionment 

w 

Ins.  2250 

Average  Clause  Limit        1179.79 
Less  excess   as   above            41.49 

Loss 

1138.30 

X 

Ins.  5250 

Average  Clause  Limit        3860.01 
Less  excess   as  above           70.79 

•                                   Loss 

3789.22 

y 

Ins.  2750 

Average  Clause  Limit        2466.50 
Less  excess  as   above          329.65 

Loss 

2136.85 

z 

Ins.  1750 

Average  Clause  Limit          500.00 
Less   excess  as  above           76.95 

Loss 

423.05 

Total  7487.42 

The  Morristown  Rule.  This  rule  starts  each  policy  at  its 
lower  limit  as  found  by  the  Giesse  rule,  and  then  distributes 
to  each,  pro  rata,  the  loss  remaining  unpaid,  if  necessary, 
until  each  reaches  its  coinsurance  clause  limit. 

EXAMPLE 


Value                Loss 

A        8065.72                '3383.41 
B         3813.76                3604.01 
C         1905.90                  500.00 

Insurance 

w    2250    > 

S    X     5250; 
z     1750                        y     y     2750 

13785.38                7487.42                                       12000 
All  policies  subject  to  80%  Average  Clause. 
ribution  Clause  Minimum                        Average  Clause  Limit 

2250                                                              2250 
X  3383.41  =  1015.03           X  3383.41  =  1179.7 

7500 
5250 

10250 
2750 

9750 
1750 

4500 


57.42  =  3578.92 


X  4104.01  =  1157.54 


X  500.00  =  194.44 


80%  of  8065.72 
5250 

80%  of  11879.48 
2750 

80%  of  5719.66 
1750 

80%  of  1905.90 


X  6987.42  =  3860.01 


X  4104.01  =  2466.50 


500.00  =  500.00 


Aggregate  Loss 


5945.93 
7487.42 


8006.30 


1541.49 


LOSSES 


Sum  of  Contribution 

Contribution  Ciau»!>e 

Clause  Minimum 

Minimum 

Deficit 

and  Excess 

w         1015.03 

263.15 

1278.18 

X          3578.92 

927.84 

4506.76 

y          1157.54 

300.09 

1457.63 

z            194.44 

50.41 
1541.49 

244.85 

5945.93 

7487.42 

Sum  of  Contribution 

Clause  Minimum      Coi 

nsurance  Clause 

Excess  Over 

and  Deficit 

Limits 

Coinsurance  L-imits 

w         1278.18 

1179.79 

98.39 

X         4506.76 

3860.01 

646.75 

y          1457.63 

2466.50 

z            244.85 

500.00 

7487.42  •       8006.30  745.14 

It  will  be  noted  that  the  amount  apportioned  to  '*w'' 
and  *'x''  exceed  the  coinsurance  limits,  and  a  reapportion- 
ment of  the  excess  is  necessary,  as  follows : 


Apportionment 

of  Excess 
y  1457.63 

z  244.85 


1702.48 


637.97 
107.17 


745.14 


Insures 

2250 
5250 
2750  ) 


1750 


Final  Apportionment 


rius  Excess 
above 


Plus  Excess 
above 


1457.63 
637.97 


244.85 
107.17 


Total 


Total 

2095.60 
352.02 

2447.62 


Pays 

1179.79        Coins.  Limit 
3860.01        Coins.  Limit 

2095.60 


352.02 


7487.42 


It  will  be  seen  from  the  foregoing  that  the  most  noticeable 
development  in  rules  for  apportionment  of  noncurrent  insur- 
ance has  been  the  increasing  use  of  the  coinsurance  or 
average  clause  limit  as  an  important  factor  in  solving  the 
problem.  Before  such  clauses  came  into  general  use  there 
were  but  two  limits  on  a  company's  liability,  namely  (a) 
the  amount  of  the  insurance  and  (b)  the  amount  of  the  loss; 
but  the  limit  reached  by  the  operation  of  the  coinsurance 
or  average  clause  is  of  equal  force — hence  the  development 
is  a  natural  one  in  connection  with  nonconcurrences  involv- 
ing policies  containing  such  a  clause. 


CHAPTER  VIII 
THE  POLICY  CONTRACT 

(Old  and  New  New  York  Standard) 

Indemnity — Insurable  Interests — Universal  Con- 
tract— Loss  BY  Fire — Cash  Value — Repair  or 
Replace — Salvage — Concealment  or  Misrepresen- 
tation— Interest  Not  Truly  Stated — Policy  Void 
— Cease  Operations — Hazard  Increased — Interest 
Not  Sole  and  Unconditional — Vacancy  and  Unoc- 
CUPANCY  —  Application  a  Warranty  —  Duty  of 
Insured — In  Case  of  Fire — In  Case  of  Loss — Proof 
OF  Loss — Plans  and  Specifications — Magistrate's 
Certificate — Exhibit  Remainder — Produce  Books 
and  Vouchers — Appraisal — Contribution — Subro- 
gation. 

The  policy  of  fire  insurance  is  one  of  the  most  important 
and  universal  contracts  in  the  world,  and  in  the  fire  insur- 
ance business  it  is  of  the  most  vital  importance,  since  it 
constitutes  the  visible  and  tangible  evidence  of  the  goods 
sold;  the  bridge  between  company  and  its  insured;  the 
charter  of  their  respective  rights  and  privileges  and  the 
rock  of  safety  or  of  wreck  in  their  mutual  relations.  Even 
the  simplest  and  clearest  language  may  be  interpreted  in 
more  than  one  way,  hence  it  is  not  strange  that  opinions 
differ  regarding  portions  of  the  standard  policy. 

There  are  a  few  fundamental  facts  that  it  is  well  to  bear 
in  mind  in  considering  this  subject. 

A  policy  of  fire  insurance  is  a  personal  contract  of  in- 
demnity.   It  does  not  insure  property.    It  insures  the  owner 

of  property  against  loss  thereof  by  fire.  It 
Personal  does  not  agree  to  pay  a  stated  sum  in  case  of 

Contract  fire,  but  to  reimburse  the  insured,  in  whole  or 

in  part,  for  a  loss  occasioned  by  fire  damaging 
or  destroying  the  particular  property  specified  in  the  policy. 
The  amount  for  which  a  policy  is  written  is  the  limit,  not 
the  measure  of  loss  payable  thereunder.  The  policy  by  its 
terms  provides  in  case  of  fire  for  the  payment  of  the  ''actual 

88 


THE  POLICY   CONTRACT  ^  89 

cash  value  of  the  property  damaged  or  destroyed  with  proper 
deductioD  for  depreciation  however  caused."  It  does  not 
contemplate  that  the  insured  shall  profit  by  the  occurrence  of 
a  fire.  Consequential  damage  is  not  covered,  such  as  loss 
of  trade,  inability  to  use  the  building,  etc.,  unless  liability 
for  such  damage  has  been  specifically  assumed,  which  is  usu- 
ally done  if  at  all  under  a  separate  contract. 

The  policy  being  a  contract  for  indemnity 
Indemnity  only,  if  fire  occurs  and  the  insured  loses  noth- 
Only  ing,  then  he  has  no  claim.     It  follows,  there- 

fore, that  there  must  be  an  insurable  interest 
in  order  to  sustain  a  valid  claim. 

Insurable  Interest.  Generally  speaking,  if  in  given  prop- 
erty one  has  a  tangible  interest  of  recognizable  value,  which 
fire  can  destroy  or  impair,  then  he  has  an  insurable  interest 
which  may  be  separately  covered  under  a  properly  drawn 
form  of  policy. 

It  does  not  necessarily  involve  ownership  of  the  property 
itself,  but  may  be  any  direct  financial  interest  in  property 
whereby  destruction  of  the  latter  will  cause  a  loss  either  of 
profit,  possession  and  use,  security  or  other  benefits  which  de- 
pend on  its  continued  existence. 

The  interests  in  realty  most  frequently  covered  by  fire  in- 
surance are  those  of  the  owner  and  mortgagee,  and,  in  such 
case,  the  policy  is  usually  written  in  the  name 
Realty  of  the  owner,  with  loss,  if  any,  payable  to  the 

mortgagee.  There  are,  however,  many  interests 
which  may  be  the  subject  of  specific  insurance  by  the  owners 
thereof  and  among  them  may  be  mentioned  the  following : 

The  building.  A  reversionary  interest. 

The  rents.  Use  and  Occupancy. 

The  rental  value.  Improvements. 

Advanced  rents.  Mortgagee  interest 

Ground  rents.  Guarantor's  interest. 

Leasehold  interest.  Lienor's  interest. 

A  fractional  interest.  Contractor's  interest. 

A  life  interest.  Vendor  under  contract.* 

An  undivided  interest.  Vendee  under  contract.* 

Liability  for  repairs  or  restoration. 

Various   contingent   liabilities,   for   example,   failure   of 

owner  to  maintain  insurance  to  protect  the  mortgagee. 

*The  vendor  in  possession  is  considered  the  owner  of  prop- 
erty, but  if  the  vendee  comes  into  possession,  then  he  is  con- 
sidered the  owner. 


DO  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

These  may  be  insiu'ed  against  loss  by  fire  or  lightning,  or 
by  tornado;  and  there  are  other  special  insurable  interests 
which  may  be  covered  in  certain  cases. 

The  interests  in  personal  property  commonly  covered  by  fire 
insurance  are  those  of  the  owners,  part  owners,  or  joint  own- 
ers, the  policies  being  written  in  their  names. 
Personalty       There  are  a  variety  of  subjects  of  insurance 
which  may  be  separately  covered.    Among  these 
may  be  mentioned : 

The  property  itself,  such  as  machinery,  stock,  fixtures,  fur- 
nishings, materials,  tools  and  supplies,  patterns,  drawings, 
dies,  household  furniture,  collections,  personal  effects,  etc. 

Property  held  in  trust  or  on  commission  or  consignment  or 
on  joint  account  or  sold  but  not  removed,  and  in  general  any 
liability  for  property  belonging  in  whole  or  in  part  to  others. 

Labor  performed  and  materials  expended  on  property  of 
others. 

Profits  or  commissions  on  property  sold,  or  held  for  sale, 
or  which  would  have  been  available  for  sale  but  for  the  fire. 

Interest  and/or  liability  of  pawnbrokers,  warehousemen, 
wharfingers,  common  carriers,  judgment  creditors,  lienors, 
lessors  or  patentees. 

Property  in  the  hands  of  courts,  sheriffs,  receivers,  trustees 
and  others  similar. 

Chattel  mortgage  interest  is  usually  uninsurable  as  such, 
though  loss,  if  any,  under  a  policy  is  often  made  payable  to  a 
chattel  mortgagee.  Many  companies  make  a  distinction  be- 
tween purchase  money  mortgages  and  other  kinds,  the  former 
being  regarded  more  favorably. 

The  interest  of  a  bank  or  loaner  of  money  on  personal 
property  is  not  usually  insured  separately,  but  loss,  if  any, 
under  the  policy  is  often  made  payable  to  a  bank  or  lender 
as  giving  additional  security. 

It  seems  proper  to  call  attention  to  the  fact  that  the  fire 
insurance  policy  is  a  contract  for  use  in  covering  any  of  the 
different  classes  of  property  and  interests  that 
Universal         are  in  existence  and  insurable,  and  that  the 
Contract  necessity    or    desirability    of    having   but    one 

standard  form  of  policy  for  all  classes  requires 
the  inclusion  of  clauses  which  are  not  always  applicable  to 


THE  POLICY   CONTRACT  91 

every  risk  insured.  Some  apply  to  realty  only,  some  to  per- 
sonalty only,  others  to  both.  The  language  used  is  in  the 
endeavor  to  fit  the  policy  to  whichever  or  whatever  class  of 
property  is  the  subject  of  insurance. 

Again,  all  classes  and  kinds  of  people  are  insured,  and 
many  of  the  restrictions  and  conditions  are  intended  for  use 
and  safeguard  against  the  unfair  or  dishonest  claimant,  who 
seeks  that  to  which  he  is  not  in  equity  entitled.  By  far  the 
great  majority  of  losses  are  adjusted  and  paid  amicably  and 
satisfactorily  to  all  concerned;  but  where  an  improper  claim 
is  made  the  company  needs  the  protection  of  every  condi- 
tion, for  it  is  always  at  a  serious  disadvantage  with  the  in- 
sured, who  knows  the  facts  which  the  company  can  only 
suspect  or  surmise,  and  that  it  can  learn  only  by  invoking 
the  aid  of  the  policy  conditions. 

What  may  be  termed  the  "old"  New  York  Standard  policy 
was  established  by  law  in  1886  and  has  served  as  a  model 
for  most  of  the  fire  insurance  policies  in  use  in  the  various 
States  of  the  United  States.  Almost  every  line  of  it  has 
been  adjudicated. 

The  *  *  new ' '  New  York  Standard  policy  was  made  effective 
as  of  January  1,  1918,  and  only  a  few  of  its  conditions  have 
been  interpreted  by  the  courts. 

It  would  be  manifestly  impossible  within  this  small  com- 
pass to  give  adequate  treatment  of  the  various  provisions, 
but  a  brief  review  and  comparison  of  those  which  most  come 
in  question  in  agency  work  may  serve  as  a  guide  to  those 
who  have  not  made  a  study  of  the  subject. 

LOSS  BY  FIRE 

•  "Does  insure  *  *  *  against  all  direct  loss  or  damage  by 
fire."  Two  conditions  will  be  noted  in  the  foregoing 
language,  namely,  that  the  loss  shall  be  "direct"  and  that  it 
shall  be  caused  "by  fire,"  and  this  language  is  used  both 
in  the  old  and  the  new  standard  policj^ 

Direct  Loss.  The  word  "direct"  here  has  the  meaning  of 
proximate.  The  fire  itself,  or  those  things  which  are  an  ac- 
companiment of  a  fire,  must  be  the  actual  cause  of  the  loss. 
Thus  damage  caused  by  heat  or  smoke  from  a  hostile  fire, 
or  by  firemen  endeavoring  to  extinguish  the  flames,  or  by  rain 


92  THE   AGENTS   KEY  TO   FIRE   INSURANCE 

or  other  of  the  elements  as  the  result  of  a  fire,  are  all  cov- 
ered by  the  policy  and  constitute  a  proper  claim  thereunder. 
On  the  other  hand :  Loss  of  trade,  or  of  use  of  building,  or  of 
leasehold  interest,  or  of  rents,  are  not  covered  (unless  lia- 
bility is  specifically  assumed),  for  such  are  held  to  be  indirect, 
not  direct  losses. 

One  of  the  federal  courts  in  defining  fire,  as  meant  in  an 
insurance  policy,  said,  **Fire  is  oxidation  which  is  so  rapid  as 
to  produce  flame  or  glow.  Fire  is  always  caused 
What  by  combustion,  but  combustion  does  not  always 

Is  Fire?  cause  fire.    No  definition  of  fire  can  be  found 

that  does  not  include  the  idea  of  visible  heat 
or  light,  and  this  is  also  the  popular  meaning  of  the  word." 

Fires  are  commonly  divided  into  two  classes:    ** Friendly" 
and  ** Hostile."    By  a  friendly  fire  is  meant  one  that  is  con- 
fined to  the  place  where  it  is  intended  to  be, 
Friendly  such  as  in  a  lamp,  gas  jet,  stove,  fireplace, 

and  Hostile  furnace,  etc.,  and  any  damage  done  by  such  a 
Fires  fire  so  confined,  or  by  smoke,  heat  or  soot  there- 

from, is  not  intended  to  be  covered  by  a  fire 
policy.  If,  however,  fire  escapes  from  its  proper  confines  and 
causes  ignition,  so  much  as  is  outside  its  intended  limits  is  a 
hostile  fire.  Such  a  fire  is  presumed  to  be  an  accident,  and 
a  hostile  or  accidental  fire  is  what  is  contemplated  in  the 
policy  cover.  As  illustrative:  If  a  lace  curtain  ignites  from 
a  gas  jet,  or  combustible  material  catches  fire  from  contact 
with  a  stove,  the  losses  caused  thereby  to  other  property  are 
covered.  But  loss  caused  by  heat,  steam,  smoke  or  soot  es- 
caping from  their  proper  places  is  not  ^covered,  such,  for 
example,  as  smoke  from  a  lamp  or  register,  or  steam  from  a 
broken  pipe.  An  explosion  is  not  to  be  considered  a  fire  as 
contemplated  in  the  policy  and  damage  by  explosion  is  not 
covered  unless  such  explosion  is  the  result  of  a  hostile  fire. 

An  eminent  adjuster  gives  the  following  definition  of  loss 
by  fire : 

**  Within  the  meaning  of  an  ordinary  policy  of  insur- 
ance the  word  'fire'  must  be  construed  in  its  ordinary 
popular  sense,  and  not  be  given  such  technical  or  re- 
stricted meaning  as  might  be  applied  to  it  upon  scientific 
analysis.  There  must  be  something  besides  mere  com- 
bustion; the  element  of  flame  or  glow  must  be  present. 
The  fire  must  be  without  intent  on  the  part  of  the  in- 
sured or  his  responsible  agent  to  injure  the  property; 


THE   POLICY   CONTRACT  93 

it  must  be  accidental  with  respect  to  the  insured.  If  in- 
tentionally kindled  for  a  useful  purpose  in  a  place 
specially  designed  or  provided,  the  fire  does  not  change 
its  character  because  the  flame  extends  unusually  high,  or 
the  heat  becomes  excessive,  or  smoke  escapes  there- 
from and  causes  damage.  The  fire  must  be  hostile  as 
distinguished  from  what  is  universally  regarded  as 
friendly,  and  it  must  be  the  proximate  and  not  the  remote 
cause  of  the  loss. 

If  a  hostile  fire  causes  an  explosion,  the  fire  is  held 
to  be  the  efficient  cause  of  the  whole  loss  which  ensues 
in  the  premises  where  it  originates  when  its  effects  are 
produced  in  direct  sequence,  though  one  of  the  incidents 
of  the  sequence  may  be  an  explosion,  on  the  theory  that 
it  could  not  have  been  intended  to  nullify  such  predomi- 
nant cause  by  the  explosion  exemption  provision. 

If,  as  the  result  of  a  hostile  fire  the  concussion  of  the 
air  causes  damage  to  neighboring  property,  the  explosion 
or  concussion^  and  not  the  fire,  is  held  to  be  the  proxi- 
mate cause  of  the  loss.  If  a  friendly  fire  causes  an  ex- 
plosion, none  of  the  damage  resulting  can  be  regarded  as 
a  loss  by  fire."  (Bament,  **What  is  a  Fire  Loss,*' 
Ins.  Soc.  of  N.  Y.) 

The  new  standard  policy  also  assumes  direct  loss  or 
damage  ''by  removal  from  premises  endangered  by  fire," 
which  was  assumed  in  somewhat  different  terms  under  the 
old  standard  (see  lines  60-66).  Both  policies  extend  their 
cover,  though  in  different  language,  **pro  rata  for  five  days 
at  each  proper  place  to  which  any  of  the  property  shall 
necessarily  be  removed  for  preservation  from  fire."  This 
provision  has  the  same  effect  as  the  distribution  clause  (see 
index) . 

CASH  VALUE 

Old  N.  Y.  Standard.  ''This  company  shall  not  be 
liable  beyond  the  actual  cash  value  of  the  property  at 
the  time  any  loss  or  damage  occurs,  and  the  loss  or 
damage  shall  be  ascertained  or  estimated  according  to 
such  actual  cash  value,  with  proper  deduction  for  de- 
preciation however  caused,  and  shall  in  no  event  exceed 
what  it  would  then  cost  the  insured  to  repair  or  replace 


94  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

the  same  with  material  of  like  kind  and  quality;^' 
*'Nor,  bej^ond  the  actual  value  destroyed  by  fire,  for 
loss  occasioned  by  ordinance  of  law  regulating  con- 
struction or  repair  of  buildings,  or  by  interruption  of 
business,  manufacturing  processes,  or  otherwise;" 

New  N.  Y.  Standard.  The  company  insures 
* ' To  the  extent  of  the  actual  cash  value  (ascertained  with 
proper  deductions  for  depreciation)  of  the  property  at  th.e 
time  of  loss  or  damage,  but  not  exceeding  the  amount  which 
it  would  cost  to  repair  or  replace  the  same  with  material 
of  like  kind  and  quality  within  a  reasonable  time  after 
such  loss  or  damage,  without  allowance  for  any  increased 
cost  of  repair  or  reconstruction  by  reason  of  any  ordinance 
or  law  regulating  construction  or  repair  and  without  com- 
pensation  for  loss  resulting  from  interruption  of  business  or 
manufacture. ' ' 

To  give  a  definition  of  ''actual  cash  value"  which  could 
be  applied  to  every  case  presented  would  be  as  difficult  a  task 
as  to  devise  one  schedule  for  rating  all  classes 
Sound  of  risks.     Value  depends  on  so  many  things 

Value  and  such  a  variety  of  conditions  that  it  seems 

impracticable  to  do  more  than  throw  some  side 
lights  on  the  methods  in  practice  for  its  determination.  This 
is  attempted  because  of  the  necessity  of  understanding  how 
to  approximate  the  actual  cash  value  (often  termed  sound 
value)  in  order  to  decide  the  amount  of  insurance  to  be  car- 
ried, particularly  where  the  coinsurance  or  average  clause  is 
made  a  part  of  the  contract. 

The  language  of  the  policy  itself  endeavors  to  make  this 
subject  clear,  for  it  first  refers  to  actual  cash  value,  then 
states   that   depreciation  must   be   considered, 
Cost  of  and  finally  contains  the  condition  that  the  value 

Replacement  shall  never  exceed  the  cost  of  repair  or  replace- 
ment. Since  the  contract  is  one  of  indemnity 
for  direct  loss,  it  is  clear  that  the  actual  cash  value  should 
never  be  considered  greater  than  the  amount  which  will  make 
good  to  the  insured,  without  gain  and  without  consideration 
of  sentiment,  or  affection,  that  which  has  been  destroyed,  and 


THE  POLICY   CONTRACT 


95 


shall  not  include  indirect  or  consequential  loss  unless  liability 
for  such  loss  is  specifically  assumed  or  covered  by  the  policy; 
also,  that  the  same  measure  should  be  used  in  determining  the 
value  of  property  undamaged  and  the  value  of  property 
damaged  or  destroyed. 

Actual  cash  value  is  sometimes  construed  as  the  equivalent 
of  market  value  at  the  time  and  place  of  fire;   losses  on 
whiskey  in  bond,  finished  leather,  grain,  sugar 
Market  and   other   commodities,  which   have   a  ready 

Value  sale   and  recognized   daily  market  value,   are 

almost  always  settled  on  the  basis  of  the  mar- 
ket value  on  the  date  of  the  fire,  with  proper  deductions  for 
the  cost,  if  any,  of  getting  them  to  market.  At  other  times 
it  is  cost  of  reproduction  as  in  the  case  of  manufactured  goods 
at  the  factory,  and  again  it  is  replacement  cost  less  de- 
preciation. It  is  not  contemplated  that  old  shall  be  replaced 
with  new,  for  that  would  mean  pecuniary  gain  to  the  insured ; 
nor  that  property  depreciated  in  value  from  whatever  cause 
shall  be  considered  worth  the  cost  of  restoration:  Neither  is 
the  value  to  be  fixed  at  what  a  junk  shop  or  second  hand 
dealer  would  give,  nor  what  it  would  bring  at  forced  sale. 
What  one  pays  for  property  does  not  necessarily  fix  its 
value,  for  the  insured  is  entitled  to  the  benefit  of  a  bargain, 
and  declines  or  advances  in  values  from  whatever  cause  are 
factors  to  be  considered. 

Building  values  are  quite  generally  determined  by  ascertain- 
ing the  cost  of  replacement  and  deducting  depreciation  prop- 
erly chargeable  on  the  building  damaged   or 
Realty  destroyed.     If  justified  by  the  extent  of  the 

loss  it  is  proper  to  add  an  allowance  for  archi- 
tects'  fees  and  the  cost  of  removing  debris  caused  by  fire. 
If  the  original  cost  is  taken  then  increases  or  decreases  in  the 
cost  of  materials  and  labor  are  to  be  considered.  Commer- 
cial depreciation  is  often  taken  into  account  as  in  the  case 
of  a  building  not  suitable  to  its  location  or  to  the  purpose  for 
which  it  is  erected.  Builders,  associations  and  boards  of 
trade  from  time  to  time  have  tried  to  formulate  some  plan 
of  percentage  reduction  according  to  age  that  would  be 
acceptable  as  an  average,  but  so  many  factors  other  than 
age  enter  into  the  question  that  no  such  table  has  proven 
satisfactory,  hence  the  judgment  of  a  competent  builder, 
or  agreement  between  owner  and  adjuster,  usually  prevails. 
In  ease  of  partial  losses  to  buildings  it  would  seem  that 
the  same  depreciation  should  be  deducted  from  cost  of  repair 


96  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

in  arriving  at  the  insurance  loss  as  from  replacement  in 
arriving  at  sound  value,  but  as  a  practical  matter  this  does 
not  always  obtain.  A  building  is  not  necessarily  of  any 
greater  value  because  some  portion  of  it  has  been  rebuilt 
with  new  material,  hence  the  companies  frequently  allow 
the  entire  cost  of  repairs.  But  in  the  case  of  plastering, 
painting  and  roofing  depreciation  is  often  deducted,  because 
such  elements  of  a  building  have  a  more  or  less  well  defined 
life  and  new  plaster,  paint  or  roofing  really  add  to  the  value. 
In  some  states  having  valued  policy  laws,  the  amount  of 
insurance  on  the  building  is  considered  to  be  its  value,  and 
this  is  generally  true  of  all  property  insured  under  a  valued 
form  of  policy,  providing  the  property  burned  is  actually 
that  which  is  described  in  such  policy. 

The  value  of  machinery  and  fixtures  in  use  is  usually  de- 
termined by  th§  net  cash  market  cost  of  replacement,  less 
depreciation  on  account  of  age  and  condition, 
Personalty  which  in  the  case  of  articles  that  are  out-of- 
date,  old-fashioned,  etc.,  would  be  very  heavy. 
On  the  other  hand,  the  value  of  a  stock  of  machinery  in  the 
manufacturer's  hands  would  ordinarily  be  the  cost  of  re- 
construction, and  in  a  dealer's  hands  the  cost  of  replacement. 
With  all  stocks  of  goods  the  net  cash  market  value  of  new 
goods  of  like  kind  and  quality,  after  deducting  depreciation 
for  age,  salability,  change  of  fashion,  shopworn  condition,  etc., 
is  usually  considered  to  be  the  value. 

One  of  the  most  troublesome  classes  of  personal  property 
on  which  to  fix  the  actual  cash  value  is  the  contents  of  a 

dwelling  house.  It  is  evident  that  certain  fur- 
Household  niture  depreciates  slowly,  some  little,  if  any, 
Furniture         and  some  actually  appreciates  in  value,  such 

as  genuine  antiques,  some  good  pictures  and 
fine  rugs.  Other  articles  depreciate  in  value  rapidly,  such  as 
hangings,  carpets,  linen  and  clothing,  especially  women's 
dresses  and  hats.  One  experienced  adjuster  gives  it  as  his 
opinion  that  with  the  average  household  a  fair  valuation  of 
all  clothing  is  50%  of  the  original  cash  cost  price ;  some  things 
are  new,  some  half-w.orn,  some  [)ractically  valueless,  and  his 
thought  is  that  by  and  large  this  figure  strikes  the  happy 
medium  which  is  equitable. 


THE   POLICY   CONTRACT  97 

Cost  to  replace  does  not  necessarily  mean  instanter,  but 
may  mean  within  a  reasonable  time,  and  it  should  always  be 
borne  in  mind  that  when  figuring  cost  of  re- 
Replacement  placement  the  lowest  cash  price  is  to  be  taken, 
for  the  reason  that  the  insured  when  paid  his 
loss  has  the  cash  in  hand  with  which  to  obtain  all  the  dis- 
counts possible. 

REPAIR  OR  REPLACE 

Old  y.  Y.  standard.  ^^It  shall  be  optional,  however, 
with  this  company  to  take  all,  or  any  part,  of  the  articles 
at  such  ascertained  or  appraised  value,  and  also  to 
repair,  rebuild,  or  replace  the  property  lost  or  damaged 
with  other  of  like  kind  and  quality  within  a  reasonable 
time  on  giving  notice,  within  thirty  days  after  the 
receipt  of  the  proof  herein  required,  of  its  intention  so 
to  do;  but  there  can  be  no  abandonment  to  this  com-  • 
pany  of  the  property  described." 

The  New  New  York  Standard  policy  condition  is  almost 
identical  in  form  with  the  above  (see  lines  176-184). 

It  is  not  customary  for  a  company  to  exercise  its  right  to 
repair,  rebuild  or  replace  property  damaged  or  destroyed. 
Occasionally,  buildings  in  the  larger  cities  are  repaired  or 
rebuilt  and  when  the  work  is  done  it  is  customary  and,  in- 
deed, necessary,  for  the  company  to  require  the  contractor 
to  obtain  from  the  insured  a  satisfaction  piece,  so-called, 
that  is,  a  signed  statement  stating  therein  that  the  work 
done  is  satisfactory  or  is  acceptable. 

Occasionally,  the  value  of  a  stock  is  agreed  upon  and  the 
salvage  then  sold  **for  account  of  whom  it  may  concern/' 
the  money  received,  less  expenses,  going  to  the  insured  and 
the  companies  making  up  the  remainder  of  such  loss  as  is  due 
under  the  conditions  of  the  policies.  Again  the  companies 
may  pay  to  the  insured  the  entire  sound  value  and  take  the 
salvage  to  be  sold  for  their  account.  Either  action  is,  how- 
ever, optional  with  the  companies,  for  the  insured  can  not 
insist  on  anything  but  the  amount  of  the  actual  loss,  and 
must  himself  handle  or  be  responsible  for  the  salvage,  if  any, 
unless  the  companies  elect  otherwise,  for  *' there  can  be  no 
abandonment  to  this  company  of  the  property  described." 
(See  also  Duty  of  Insured  in  Case  of  Loss.) 


98  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

''THIS  ENTIRE  POLICY  SHALL  BE  VOID 

Old  N.  Y.  Standard.  If  the  insured  has  concealed  or 
misrepresented,  in  writing  or  otherwise,  any  material 
fact  or  circumstance  concerning  this  insurance  or  the 
subject  thereof;  or  if  the  interest  of  the  insured  in  the 
property  be  not  truly  stated  herein;  or  in  case  of  any 
fraud  or  false  swearing  by  the  insured  touching  any 
matter  relating  to  this  insurance  or  the  subject  thereof, 
whether  before  or  after  a  loss." 

The  New  N.  Y.  Standard  policy  is  identical  except  that 
it  omits  the  words  ''in  writing  or  otherwise"  and  "or  if 
the  interest  of  the  insured  in  the  property  be  not  truly 
stated  herein,"  it  being  considered  that  both  of  these  are 
covered  under  other  provisions. 

The  provision  regarding  concealment  is  construed  to  mean 
a  willful,  intentional  concealment  or  misrepresentation,  and 
"material"  to  mean  in  this  sense  substantial  or  important, 
as  distinguished  from  trivial.  Likewise  fraud  or  false  swear- 
ing must  be  material,  not  trivial,  to  avoid  the  policy. 

The  provision  regarding  interest  truly  stated  means  in 
general  if  the  interest  be  untruly  stated.  For  example, 
the  policy  is  void  if  the  interest  is  stated  to  be  that  of  sole 
and  unconditional  owner,  and  it  develops  that  the  interest  is 
that  of  guardian  or  trustee  only. 

Both  the  old  and  the  new  standard  policies  specify  certain 
kinds  of  property  which  cannot  be  covered  at  all  under 
any  circumstances,  viz.:  "accounts,  bills,  currency,  deeds, 
evidences  of  debt,  money,  notes,  or  securities." 

They  also  specify  certain  kinds  of  property  which  are 
not  covered  unless  liability  is  specifically  assumed,  the 
language  being  as  follows: 

Old  Standard.  "Nor,  unless  liability  is  specifically  as- 
sumed hereon,  for  loss  to  awnings,  bullion,  casts,  curiosities, 
drawings,  dies,  implements,  jewels,  manuscripts,  medals, 
models,  patterns,  pictures,  scientific  apparatus,  signs,  store 
or  office  furniture  and  fixtures,  sculpture,  tools,  or  property 
held  on  storage  or  for  repairs." 


THE   POLICY   CONTRACT  99 

New  Standard.  *'Nor  unless  specifically  named  hereon  in 
writing,  bullion,  manuscripts,  mechanical  drawings,  dies  or 
patterns. ' ' 

It  will  be  noted  that  the  new  standard  is  much  broader 
in  its  cover  than  the  old,  having  narrowed  the  list  of  kinds 
of  property  not  covered  unless  specifically  named  to  those 
which  experience  shows  are  of  such  a  nature  as  to  require 
special  cover  or  provision.  The  value  of  bullion,  manuscripts, 
drawings,  dies  and  patterns  is  of  such  uncertain  nature  that 
it  is  preferable  for  both  insured  and  company  to  have  some 
special  understanding  regarding  their  cover  rather  than  to 
bring  them  under  the  general  cover  of  the  policy,  especially 
where  coinsurance  conditions  prevail. 

We  now  come  to  a  very  important  difference  between  the 
old  and  the  new  standard  policies.  Under  the  old  standard 
the  policy  was  rendered  void  by  a  violation  of  any  one  of 
fourteen  conditions,  which  under  the  new  standard  are  re- 
duced to  five,  the  others  rendering  the  policy  void  only 
during  the  violation,  and  automatically  reinstating  it  when 
the  violation  ceases. 

The  Old  Standard  policy  reads: 

^^THIS  ENTIRE  POLICY  UNLESS  OTHERWISE 
PROVIDED  BY  AGREEMENT  INDORSED  HEREON 
OR  ADDED  HERETO  SHALL  BE  VOID  •  • 

The  New  Standard  policy  reads: 

^^THIS  ENTIRE  POLICY  SHALL  BE  VOID,  UN- 
LESS OTHERWISE  PROVIDED  BY  AGREEMENT 
IN  WRITING  ADDED  HERETO." 


The  five  conditions  which  are  identical  in  substance  are 
as  follows: 

***  *  if  the  interest  of  the  insured  be  other  than  uncon- 
ditional and  sole  ownership."   This  requires  that  the  interest 
be  clearly  set  forth.    It  does  not  mean  that  the 
Ownership        building  or  personal  property  at  No.  24  John 
Interest  Street  must  be  owned  by  the  insured,  but  if 

he  does  not  own  it  solely  and  unconditionally 
then  the  policy  must  state  what  his  interest  is  therein,  such  as 
a  half  interest  or  trustee  interest,  etc.    One  method  of  stat- 


100  THE  AGENTS   KEY   TO   FIRE   INSURANCE 

ing  the  insured's  interest  is  to  use  the  general  phrase  **as 
interest  may  appear,"  which  broad  clause  will  cover  his  in- 
terest of  whatever  name  or  nature. 

The  following  may  be  cited  as  examples  of  conditions,  each 
of  which  effects  a  change  in  ownership  that  avoids  the  policy : 

(a)  Sale  of  the  property. 

(b)  An  assignment  for  the  benefit  of  creditors. 

(c)  The  appointment  of  a  trustee  in  bankruptcy;  though 

the  appointment  of  a  receiver  in  bankruptcy  is  not 
usually  considered  a  change  of  ownership. 

(d)  If  a  co-partnership  takes  in  a  new  partner,  but  not 

if  instead  one  retires. 

(e)  Contract  of  sale  where  vendee  is  given  or  takes  pos- 

session. 

Contracts  of  Sale.  An  executory  contract  of  sale,  without 
change  of  possession,  is  not  a  breach  of  the  policy  con- 
ditions referring  to  change  of  '  *  interest,  title  or  possession. ' ' 
Loss  will  usually  fall  on  the  vendor  if  a  building  is  damaged 
by  fire  between  the  making  of  the  customary  contract  of  sale 
and  the  delivery  of  the  deed. 

On  the  other  hand,  if  the  vendee  under  such  a  contract  is 
let  into  possession,  there  is  a  breach  of  condition.  A  well- 
known  authority  states,  ''the  test  is  said  to  be  whether  the 
vendor  has  parted  with  absolute  control  and  dominion  over 
the  subject  of  insurance,  and  where  a  formal  delivery  of  the 
deed  is  delayed  for  convenience  only,  such  a  vendee  becomes 
an  equitable  owner  and  liable  for  any  loss ;  and  the  vendor  in 
such  case  cannot  enforce  his  insurance  because  there  has  been 
a  change  of  title  or  possession."    (See  *.) 

Where  the  interests  of  both  parties  to  a  contract  of  sale 
of  realty  are  to  be  protected  under  the  same  fire  insurance 
policy,  there  are  two  methods  which  may  be  chosen: 

First.  To  write  the  policy  in  the  names  of  the  vendor  and 
the  vendee,  as  interest  may  appear. 

Second.  To  write  the  policy  in  the  name  of  the  one  in 
possession,  whether  vendor  or  vendee,  with  loss  payable  to 
the  other  party  to  the  contract,  as  interest  may  appear. 

*EcIffar  J.  Nathan,  "OWNERSHIP" :    Insurance  Society  of  New  York. 


THE  POLICY  C'6n^RA<:T  101 

One  reason  for  this  general  condition  is  to  prevent  an 
insured  from  collecting  on  the  basis  of  entire  value  of  prop- 
erty when  he  is  in  fact  only  a  part  owner  and  therefore  only 
a  part  loser  in  case  of  its  destruction. 

'*If  the  subject  of  insurance  be  a  building  on  ground 


not  owned  by  the  insured  in  fee  simple 


In  such  cases  the  insured  might  be  tempted  to  permit  a 
destruction  of  the  building  in  order  to  collect  the  value 
thereof  from  the  insurance  before  the  property  passed  from 
his  possession.  Under  this  provision  a  policy  on  building 
standing  on  leased  land  is  void  ' '  unless  otherwise  provided. ' ' 

^^If  with  the  knowledge  of  the  insured  foreclosure 
proceedings  be  commenced  or  notice  given  of  sale  of 
any  property  *  *  *  by  reason  of  any  mortgage  or  trust 
deed;^^ 

Such  action  tends  to  increase  the  possibility  of  moral 
hazard  for  obvious  reasons  and  introduces  a  new  and  ma- 
terial interest  and  condition  of  which  the  insurance  company 
is  entitled  to  have  notice. 

^*If  any  change,  other  than  by  the  death  of  an  in- 
sured,  takes  place  in  the  interest,  title  or  possession  of 
the  subject  of  insurance  (except  change  of  occupants 
without  increase  of  hazard)." 

Such  a  change  brings  a  different  condition  that  may  affect 
the  desirability  of  the  risk  and  affect  the  contract  as  a 
whole  (see  remarks  under  ^^sole  and  unconditional  owner- 
ship"). 

*^If  this  policy  be  assigned  before  a  loss. ' ' 

This  would  change  the  most  essential  feature  of  the  con- 
tract, which  is  a  personal  one.  If  permitted  without  notice 
to  or  consent  of  the  company  it  would  have  no  opportunity 
to  select  the  parties  holding  its  policy  contracts  or  to  pass 
upon  their  reliability. 

The  remaining  conditions  which  are  grouped  under  the 
general  heading  voiding  the  policy  in  the  old  standard,  are, 
in  the  new  standard  policy  grouped  under  the  following 
heading : 


102   .  ;,  I   ,  T^J.,  AGENXS   KFV    ^O  FIRE  INSURANCE 

'' UNLESS  OTHERWISE  PROVIDED  BY  AGREE- 
MENT IN  WRITING  ADDED  HERETO  THIS  COM- 
PANY SHALL  NOT  BE  LIABLE  FOR  LOSS  OR 
DAMAGE  OCCURRING.'^ 

^^(a)   While  the  insured  shall  have  any  other  contract 
of  insurance,  whether  valid  or  not,  on  property  covered 
in  whole  or  in  part  by  this  policy;" 
(Compare  with  lines  11-13,  old  standard.) 

In  many  cases  companies  are  willing  to  insure  only  when 
the  amount  of  total  insurance  carried  is  limited,  hence  the 
necessity  of  this  provision. 

^^(b)   While   the  hazard   is   increased  by   any  means 
within  the  control  or  knowledge  of  the  insured." 
(Compare  with  lines  14-15,  old  standard.) 

It  is  the  assumption  that  the  rate  at  which  a  policy  is 
issued  is  based  on   the  conditions  existing  at  the  time  of 

issuance,  and  upon  their  continuance  during 
Hazard  the  life  of  the  policy  in  practically  unchanged 

Increased  form,  and  that  it  is  inequitable  to  continue  a 

contract  covering  increased  hazards  without  the 
consent  of  the  company  and  a  consideration  satisfactory 
to  it.  Authorities  generally  hold  it  is  not  intended  that  an 
incidental,  temporary  increase  of  hazard  shall  void  the 
policy,  but  that  a  change  in  the  premises  or  their  use  or 
exposure  must  be  more  or  less  permanent  in  character,  or 
continued  for  a  period  of  time  that  cannot  be  considered 
as  merely  temporary,  before  same  is  voided.  The  use  of 
a  tin  chimney  while  a  brick  chimney  was  being  erected  or 
repaired   would    be    a   temporary    increase  ,of   hazard   that 

would  not  void  the  policy.  The  increase  must 
Must  Be  be  material,  not  merely  trivial,  and  be  of  rela- 

Material  tive  importance,  and  as  such  may  be  within 

the  premises  or  adjacent  thereto.  The  instal- 
lation of  a  power  wood-sawing  machine  in  a  store  or  the 
erection  of  a  planing  mill  a  few  feet  distant  would  be  a 
material  increase  of  hazard;  but  sawing  wood  with  a  buck 
saw  or  building  a  dwelling  10  feet  distant,  would  not  usually 
be  considered  a  material  increase.  The  insured  should 
promptly  notify  the  company  when  an  increase  of  hazard 


THE  POLICY   CONTRACT  103 

comes   to  his  knowledge;   by  ''promptly"  is  meant  within 
a  reasonable  time  or  without  undue  delay. 

The  policy  specifies  a  number  of  things  which  are  pre- 
sumed to  increase  the  hazard  either  from  a  physical  or  moral 
standpoint,  and  this  may  be  noted  by  reading 
Physical  the  entire  paragraphs  of  which  the  foregoing 

or  Moral  quotations  are  a  portion.    It  is  manifestly  im- 

plied by  these  specified  things  which  are  pre- 
sumed to  increase  the  hazard  and  thus  void  the  policy  that 
the  general  phrase  ' '  increase  of  hazard ' '  refers  also  to  things 
other  than  physical,  and  courts  have  held  that  an  increase  in 
moral  hazard,  or  what  might  be  termed  personal  hazard, 
known  to  the  insured  and  not  reported  to  the  company  voided 
the  policy.  One  such  case  was  where  enemies  had  threat- 
ened to  burn  all  of  a  man's  property,  having  already  set 
fire  to  one  of  his  buildings.  This  seems  an  extreme  case,  and, 
generally  speaking,  it  is  the  physical  hazard  that  is  thought 
of  in  connection  with  this  general  term. 

An  insured  is  usually  considered  responsible  for  the  acts 
of  his  duly  authorized  agent;  therefore  knowledge  coming 
to  such  agent  while  acting  within  the  scope  of  his  authorized 
work  is  considered  knowledge  on  the  part  of  the  insured. 

It  should  be  borne  in  mind  that  the  old  standard  policy  is 
voided  by  breach  of  this  condition,  while  under  the  new 
standard  the  company  is  not  liable  during  the  breach.  The 
foregoing  remarks  apply  to  either  form. 

"(c)  While    mechanics    are    employed    in    building, 

altering  or  repairing  the  described  premises  beyond  a 

period  of  fifteen  days;'' 

(Compare  with  lines  15-16,  old  standard.) 

This  provision  is  necessary  because  in  many  cases  where 
mechanics  are  employed  for  longer  than  15  days  the  resulting 
increase  of  hazard  requires  an  extra  premium  in  order  to 
compensate  the  company  for  the  extra  risk. 

"(d)  While  illuminating  gas  or  vapor  is  generated 
on  the  described  premises;  or  while  (any  usage  or  cus- 
tom to  the  contrary  notwithstanding)  there  is  kept,  used 
or  allowed  on  the  described  premises  fireworks,  greek 


104  THE  AGENTS   KEY   TO   FIRE  INSURANCE 

fire,  phosphorus,  explosives,  benzine,  gasoline,  naphtha 
or  an}'^  other  petroleum  product  of  greater  inflammability 
than    kerosene    oil,    gunpowder    exceeding    twenty-five 
pounds,  or  kerosene  oil  exceeding  five  barrels;" 
(Compare  with  lines  22-28,  old  standard.) 

This  provision  is  proper  because  of  the  marked  increase 
of  hazard  resulting  from  their  presence  in  a  risk. 

^^(e)  If  the  subject  of  insurance  be  a  manufacturing 
establishment  while  operated  in  whole  or  in  part  between 
the  hours  of  ten  P.  M.  and  five  A.  M.,  or  while  it  ceases 
to  be  operated  beyond  a  period  of  ten  days;" 
(Compare  with  lines  13-14,  old  standard.) 

The  question  is  often  asked,  if  a  factory  is  not  operating 
on  the  date  a  policy  takes  effect  and  so  continues  for  more 
than  ten  days,  is  the  policy  thereby  rendered 
Cease  void?    From  the  wording  of  this  condition  it 

Operations  is  clear  that  the  policy  is  void  under  the  old 
N.  Y.  Standard  only  when  operations  cease 
subsequent  to  the  date  when  policy  takes  effect,  but  the 
policy  may  be  voided  in  such  case  because  of  the  concealment 
of  a  material  fact.  Under  the  new  standard  the  company 
would  not  be  liable  under  the  conditions  shown  in  caption. 
Hence,  for  safety  a  permit  should  be  attached. 

Privilege   to   '* cease  operations"   in  such  case  would  be 
technically  ineffective,  for  being  already  idle  it  cannot  cease 
operations.    For  this  reason  the  permit  is  often  worded, 
''Privilege  granted  to  cease  operations  or  to  remain 
idle  for  a  period  of  not  exceeding  ....  days  at  any  one 
time. ' ' 

''Cease  to  be  operated"  is  usually  defined  as  a  condition 
where  the  factory  is  not  producing  goods.  A  manufacturing 
plant  is  not  usually  in  operation  when  merely  the  office  force 
and  shipping  department  are  at  work,  or  workmen  are  busy 
making  repairs.  A  plant  has  "ceased  operations"  when  it  is 
"shut  down"  as  that  phrase  is  commonly  used  by  manufac- 
turers. 

"  (f)  While  a  described  building,  whether  intended  for 
occupancy  by  owner  or  tenant,  is  vacant  or  unoccupied 
beyond  a  period  of  ten  days;" 
(Compare  with  lines  28-30,  old  standard.) 


THE  POLICY   CONTRACT  105 

The  terms  ''Vacancy"  and  "Unoccupancy "  are  not 
synonymous:    A  vacant  building  is  one  that  is  empty — one 

void  of  all  but  rubbish  or  waste  paper  or 
Vacancy  other  similar  things;   an  unoccupied  building 

and  is  one  that  may  have  therein  the  things  usual 

Unoccupancy  to  it,  but  which  has  not  the  presence  of  human 

beings  in  the  customary  way. 

As  applied  to  a  dwelling  house,  unoccupancy  has  been  de- 
fined as  **  lacking  the  habitual  presence  and  continued  abode 
of  human  beings  within  it."  The  New  York  Court  of  Ap- 
peals in  defining  occupancy  says,  "For  a  dwelling  house  to 
be  in  a  state  of  occupation,  there  must  be  in  it  the  presence 
of  human  beings  as  at  their  customary  place  of  abode,  not 
absolutely  and  uninterruptedly  continuous,  but  that  must  be 
the  place  of  usual  return  and  habitual  stoppage." 

Periodical  inspection  does  not  constitute  occupancy,  nor 
does  the  presence  of  a  caretaker  during  the  day.  Some  au- 
thorities hold  that  a  caretaker  living  in  a  house  does  not 
render  it  ''occupied,"  and  most  will  agree  that  it  is  not 
occupancy  in  any  proper  sense ;  on  the  other  hand,  if  servants, 
as  distinguished  from  mere  caretakers,  are  living  in  a  house 
and  maintaining  it  in  constant  readiness  for  the  owner's  (or 
tenant's)  presence,  then  it  is  usually  considered  to  be  occu- 
pied within  the  meaning  of  the  policy. 

The  occupation  of  a  tenant  house  on  a  farm,  even  where  the 
outbuildings  are  in  use,  does  not  constitute  occupancy  of  the 
main  dwelling;  nor  would  occupancy  of  the  main  dwelling  and 
outbuildings  constitute  occupancy  of  the  tenant  house. 

A  store,  even  though  filled  with  goods,  is  not  occupied  un- 
less it  is  open  for  trade  in  the  customary  manner.  On  the 
other  hand,  a  school  is  not  usually  considered  unoccupied 
during  the  vacation  period,  even  though  no  human  beings  are 
in  it.  A  church  is  usually  considered  occupied  if  services  are 
held  in  it  at  regular  periods. 

"(g)  By  explosion  or  lightning,  unless  fire  ensue,  and, 
in  that  event,  for  loss  or  damage  by  fire  only." 

(Compare  with  lines  34-35,  old  standard.) 

This  clause  in  the  new  N.  Y.  Standard  policy  covers  a  fire 
loss  following  one  by  explosion  or  lightning,  whereas  under 


106  THE  AGENTS   KEY   TO   FIRE   INSURANCE 

the  old  N.  Y.  Standard  form  the  lightning  cover  had  to  be 
assumed  by  attaching  a  rider. 

^^If  an  application,  survey,  plan,  or  description  of 
property  be  referred  to  in  this  policy  it  shall  be  a  part 
of  this  contract  and  a  warranty  by  the  insured.*^ 

(Omitted  from   new   New  York   Standard  Policy.) 

If  the  form  reads,  '*as  per  application"  or  **as  described 
in  survey'*  or  "as  shown  on  plan"  or  any  similar  language, 

the  insured  is  bound  by  the  information  given 
Application  or  the  statements  made  in  such  documents  even 
a  Warrantee    more  than  if  made  in  the  form  itself,  for  these 

documents  become  warranties  by  the  insured, 
and  a  warranty  must  be  lived  up  to  or  the  policy  is  void.  If 
the  insured  warrants  that  a  building  has  a  shingle  roof  and 
the  roof  is  actually  of  tin,  the  policy  is  void  strictly  speak- 
ing, although,  of  course,  few  companies  would  care  to  take 
advantage  of  the  avoidance  on  such  grounds. 

The  Old  N.  Y.  Standard  policy  provides  that  unless  other- 
wise endorsed  it  shall  be  void 

"If  the  subject  of  insurance  be  personal  property  and 
be  or  become  encumbered  by  a  chattel  mortgage." 

This  was  felt  to  be  an  unnecessarily  harsh  provision,  since 
a  chattel  mortgaged  piano,  for  example,  if  included  in  a 
household  furniture  policy  would  void  the  entire  contract. 

Hence  in  drafting  the  New  N.  Y.  Standard  the  provision 
was  changed  to  read  as  follows: 

"Unless  otherwise  provided  by  agreement  in  writing 
added  hereto  this  company  shall  not  be  liable  for  loss 
or  damage  to  any  property  insured  hereunder  while 
incumbered  by  a  chattel  mortgage,  and  during  the  time 
of  such  incumbrance  this  company  shall  be  liable  only 
for  loss  or  damage  to  any  other  property  insured  here- 
under. ' ' 

Old  N.  Y.  Standard:  "If  a  building  or  any  part  thereof 
fall,  except  as  the  result  of  fire,  all  insurance  by  this  policy 
on  such  building  or  its  contents  shall  immediately  cease." 


THE  POLICY  CONTRACT  107 

This  is  unchanged  in  the  New  N.  Y.  Standard  except  for 
the  insertion  of  the  word  ** material"  before  ^^part,"  thus 
bringing  the  policy  condition  in  line  with  court  decisions 
that  a  substantial  part  of  the  building  must  fall  in  order  to 
terminate  the  insurance. 

The  conditions  relating  to  added  clauses  and  provisions, 
to  waiver  and  to  pro  rata  liability  are  substantially  alike  in 
both  standard  policies  and  need  no  special  comment  here 
(see  chapter  on  Waiver  and  Estoppel). 

The  conditions  relating  to  cancellation  of  policy  and  to 
mortgage  interest  are  felt  of  sufficient  importance  to  require 
separate  treatment  (see  Index). 

"Noon."  The  new  N.  Y.  Standard  policy  contains  an 
interpretation  of  the  word  "noon"  as  meaning  ''noon  of 
standard  time  at  the  place  of  loss  or  damage."  Under  most 
judicial  constructions  noon  has  heretofore  meant  solar  instead 
of  standard  time  and  with  the  introduction  of  daylight 
saving  time  it  was  felt  desirable  to  have  a  clear  definition 
in  the  policy  so  that  all  doubt  should  be  removed. 

For  convenience  of  reference  tha  duties  of  the  insured 
in  case  of  fire  and  in  case  of'  claim  for  loss  are  grouped 
together. 

DUTY  OF  THE  INSURED  IN  CASE  OF  FIRE 

*'This  company  shall  not  be  liable  for  loss  caused  *  *  by 
neglect  of  the  insured  to  use  all  reasonable  means  to  save 
and  preserve  the  property  at  and  after  a  fire  or  when  the 
property  is  endangered  by  fire  in  neighboring  premises;" 

This  charges  the  insured  with  the  duty  of  taking  such 
reasonable  measures  to  put  out  the  fire  as  common  sense 
would  dictate,  such  as  giving  the  alarm,  using  available  means 
for  extinguishing  the  flames,  as,  for  example,  the  water  pails, 
chemical  extinguishers,  standpipe  and  hose,  etc.,  but  it  does 
not  require  him  to  endanger  life  and  limb.  In  some  sense 
this  duty  is  a  public  one,  quite  apart  from  any  question  of 
insurance,  for  fire  may  spread  from  his  premises  to  those 
adjoining;  in  Prance  and  some  other  countries  he  would  be 
liable  for  damage  to  the  property  of  others  caused  by  a  fire 
that  originated  on  his  premises. 


108     .  THE  AGENTS    KEY   TO   FIRE   INSURANCE 

It  is  even  anticipated  that  in  the  exercise  of  this  duty  the 
insured   will  remove  to  a  place  of  safety  property  endan- 
gered by  fire  in  neighboring  premises,  for  both 
Removal  the   old   and   the   new   standard  policies   spe- 

to  Safety  cifically   assume  liability   for  five   days   when 

property  is  so  removed. 

When  property  is  so  removed  *Moss  by  and  expense  of  re- 
moval from  premises  endangered  by  fire^^  is  a  proper  and 
valid  claim  on  the  insurance,  within  reasonable  limits. 

The  duty  also  extends  after  the  fire  and  requires  the  insured 
*Ho  use  all  reasonable  means  to  save  and  preserve  the  prop- 
erty^'    Therefore,  it  is  not  a  proper  fulfil- 
Prevent  ment  of  his  contract  if  the  insured  does  noth- 

Further  ing  to  prevent  further  damage — beyond   that 

Loss  caused  by  fire  and  water.    He  should  not  **let 

everything  stay  just  as  it  is  until  the  insurance 
people  come"  as  so  often  is  said,  but  should  dry  out  goods 
that  will  otherwise  spoil  or  mildew,  oil  or  grease  machinery 
to  keep  it  from  rusting  and  do  all  the  other  things  that  a 
careful  and  prudent  man  would  do  if  uninsured.  A  reduction 
of  losses  as  a  whole  will  bring  about  a  reduction  in  the  cost 
of  insurance  as  a  whole.  The  theory  of  this  condition  where- 
by the  company  is  not  liable  for  neglect  of  the  insured  is 
that  loss  resulting  therefrom  is  not  a  loss  caused  directly  by 
fire,  but  rather  by  the  insured's  lack  of  care.  Wilful  neglect 
of  the  insured  to  protect  property  comes  perilously  near  to 
being  fraud. 

DUTY  OF  THE  INSURED  IN  CASE  OF  LOSS 

When  loss  occurs  there  are  certain  things  which  the  insured 
MUST  do,  and  others  which  he  may  be  required  to  do  upon 
notice  from  the  company.    The  unconditional  duties  are : 

**To  give  immediate  notice  in  writing"  to  the  company; 
This  is  held  to  mean  ** within  a  reasonable  time,"  and  notice 
to  the  agent  is  notice  to  the  company,  although  such  notice  is 
sometimes  sent  direct  to  the  company  by  registered  mail. 

"Protect  the  property  from  further  damage;" 
This  has  been  referred  to  elsewhere  and  emphasizes  the  duty 
of  the  insured   to   ^'^save  and  preserve   the  property   from 
further  damage." 


THE    POLICY    CONTRACT  109 

**  Forthwith   separate   the   damaged   and   undamaged  per- 
sonal  property,  put  it  in  the  best  possible  order; ^^ 

* '  Make  a  complete  inventory  of  the  same,  stating  the  quan' 
titv  and  cost  of  each  article  and  the  amount  claimed  there- 


The  New  N.  Y.  Standard  policy  provides  that  the  insured 
shall  ''furnish"  a  complete  inventory  of  damaged,  undam- 
aged and  destroyed  property,  thus  leaving  no  question  that 
the  inventory  shall  be  complete  and  shall  not  merely  be 
made  but  actually  furnished  to  the  company. 

The  law  does  not  ask  impossibilities;  the  insured  must 
use  every  reasonable  effort  to  comply  with  this  requirement, 
but  where  the  facts  cannot  be  ascertained  exactly,  then  the 
insured  must  do  the  best  he  can  to  comply. 

The  statement  referred  to  in  the  following  is  commonly 
called  the  ''Proof  of  Loss." 

"And,  within  sixty  days  after  the  fire,  unless  such  time 

"is  extended  in  writing  by  this  company,  shall  render  a 

"statement  to  this  company,  signed  and  sworn  to,  stating 

"the  knowledge  and  belief  of  the  insured 

"as  to  the  time  and  origin  of  the  fire ; ^ * 

"the  interest  of  the  insured  and  of  all  others  in  the 

property ; ' ' 
' 'The  cash  value  of  each  item  thereof  and  the  amount 

of  loss  thereon;" 
"^11  encumbrances  thereon;" 

"all  other  insurance,  whether  valid  or  not,  covering 
any  of  said  propert}^ ; ' ' 

"a  copy  of  all  the  descriptions  and  schedules  in  all 
policies ; ' ' 
"any  changes  in  the  title,  use,  occupation,  location, 
possession,  or  exposures  of  said  property  since  the 
issuing  of  this  policy ; '  ^ 
"by  whom  and  for  what  purpose  any  building  herein 
described  and  the  several  parts  thereof  were  occu- 
pied at  the  time  of  fire;" 
The  statements  contained  in  this  "proof  of  loss,"  it  will 


110  THE  AGENTS   KEY   TO   FIRE   INSURANCE 

be  noted,  call  for  information,  furnished  and  sworn  to  by 
the  insured,  tending  to  establish  the  *' actual  cash  value"  of 
the  property  damaged  or  destroyed,  and  also  to  show  whether 
or  not  any  of  the  conditions  of  the  policy  have  been  violated. 

The  old  and  the  new  N.  Y.  Standard  policies  are  alike  in 
substance  as  the  requirements  relating  to  proof  of  loss. 

In  addition  to  these  unconditional  duties  enumerated,  the 
insured  is  obligated,  IF  REQUIRED,  to  perform  the  follow- 
ing duties: 

^ ^furnish  verified  plans  and  specifications  of 
Plans  any  building,  fixtures,  or  machinery  damaged 

or  destroyed," 

Under  the  old  but  not  under  the  new  N".  Y.  Standard 
policy  the  insured,  if  required,  must 

^  *  furnish  a  certificate  of  the  magistrate  or  notary  pub- 
lic (not  interested  in  the  claim  as  a  creditor  or  other- 
wise, nor  related  to  the  insured)  living  near- 
Magistr at e ' s       est  the  place  of  fire,  stating  that  he  has  ex- 
Certificate  amined  the   circumstances   and  believes  the 

insured  has  honestly  sustained  loss  to  the 
amount  that  such  magistrate  or  notary  public  shall 
certify. '  * 

These  two  clauses  are  omitted  from  some  policies,  notably 
Massachusetts.  The  requirement  of  verified  plans  is  almost 
a  necessity  where  property  has  been  totally  destroyed.  The 
magistrate's  certificate  is  seldom  required,  and  when  called 
for  the  word  *^ nearest''  may  be  construed  reasonably. 

^^shall  exhibit  to  any  person  designated  by  this  com- 
pany all  that  remains  of  any  property  herein 
Exhibit  described,  and  submit  to   examinations  under 

Remainder       oath  by  any  person  named  by  this  company, 
and  subscribe  the  same;" 
*  *  shall  produce  for  examination  all  books  of  account, 
bills,  invoices,  and  other  vouchers,  or  certified 
Produce  copies    thereof   if   originals   be    lost,    at   such 

Books  and  reasonable  place  as  may  be  designated  by  thia 
Vouchers  company  or  its  representative,  and  shall  per^ 

mit  extracts  and  copies  thereof  to  be  made." 


THE    POLICY    CONTRACT  1  1 1 

In  the  new  N. 'Y.  Standard  policy  an  interpretation  is 
placed  upon  these  requirements  by  law  by  inserting  that 
the  exhibit  shall  be  as  reasonably  required  and  that  both 
the  place  and  the  time  for  examination  of  books  of  account 
shall  be  reasonable. 

Here,  again,  the  law  does  not  require  impossibilities,  bul 
the  insured  must  use  every  reasonable  effort  to  exhibit  the 
remains  of  property,  and  must  not  dispose  of  it  until  the 
company  has  had  an  opportunity  to  examine  same;  but  the 
company,  too,  must  be  reasonable  in  the  time  it  takes  to 
make  the  examination.  There  is  usually  no  reason,  however, 
for  not  being  able  to  produce  books  of  account,  bills,  etc.,  or 
for  not  making  every  reasonable  effort  to  obtain  duplicates, 
and  there  is  no  reason,  save  physical  disability,  for  not 
submitting  to  examination  under  oath  touching  those  matters 
which  have  a  material  bearing  on  the  loss,  or  the  origin  of 
the  fire,  or  the  insurance. 

APPRAISAL 

The  policies  of  every  state  contain  a  provision  in  some 
form  for  the  submission  to  appraisal  of  a  loss,  the  amount  of 
which  cannot  be  agreed  upon.  All  such  provisions  provide 
for  an  appraiser  chosen  by  the  insured  and  one  by  the  com- 
pany, together  with  a  third  chosen  by  these  two,  or  by  some 
court  or  state  official.  It  is  provided  that  such  appraisers 
shall  be  ' '  competent  and  disinterested, ' '  and  it 
Competent  is  expected  that  each  shall  act  without  bias 
and  toward  either  party  to  the  loss.     By  *' corn- 

Disinterested  petent"  is  meant  one  who  has  sufficient  knowl- 
edge concerning  the  kind  of  property  involved 
to  determine  values  and  estimate  damages  thereto.  A  build- 
ing contractor  would  not  usually  be  competent  to  appraise  a 
loss  on  dry  goods,  nor  a  ribbon  salesman  a  loss  to  a  building. 
B}'-  *^ disinterested"  is  meant  one  who  has  no  pecuniary  in- 
terest in  the  loss,  is  not  related  to  any  interested  party  and 
has  no  connection  that  would  tend  to  influence  his  award. 
It  would  not  ordinarily  bar  out  one  who  had  done  previous 
work  for  either  party,  or  expected  to  do  work  for  either  in 
the  future,  but  usually  it  is  inadvisable  to  name  as  an  ap- 
praiser or  umpire  one  who  has  previously  examined  the  loss 
and  given  an  opinion  or  estimate  of  its  amount.  In  refer- 
ring to  appraisers  it  is  best  not  to  use  the  terms  'Hhe  com- 
pany's appraiser"  or  ''the  insured's  appraiser,"  for  this 
tends  to  destroy  the  element  of  disinterestedness;  the  better 


112  THE  AGENTS   KEY   TO   FIRE  INSURANCE 

tenu  to  use  is  'Hhe  appraiser  uamed  by  the  insured  (or  the 
company)." 

While  the  policy  apparently  provides  for  a  submission  to 
appraisal  in  event  of  disagreement  on  demand  by  either  the 

insured  or  the  company,  there  is  no  penalty 
Requirements  provided  if  the  company  refuses,  other  than  to 

be  sued  at  law,  whereas  the  policy  provides  a 
penalty  if  the  insured  refuses,  for  one  of  its  provisions  is 
that  ^^No  suit  or  action  on  this  policy,  for  recovery  of  any 
claim,  shall  be  sustainable  in  any  court  of  law  or  equity  until 
after  FULL  COMPLIANCE  BY  THE  INSURED  WITH  ALL 
THE  FOREGOING  REQUIREMENTS,"  and  he  must,  there- 
fore, submit  to  appraisal  if  demanded,  though  he  may  after- 
wards sue  in  court  if  he  so  chooses.  It  may  be  stated,  how- 
ever, that  appraisals  are  usually  sustained  by  the  courts  un- 
less material  bias  or  incompetence  is  shown  on  the  part  of 
one  or  more  of  the  appraisers,  or  the  umpire,  or  undue  influ- 
ence is  exerted. 

The  New  N.  Y.  Standard  policy  changes  this  condition  to 
read  **  until  all  the  requirements  of  this  policy  shall  have 
been  complied  with,"  which  does  not  change  the  obligation 
which  the  insured  has,  but  opens  the  way  for  suit  under 
some  other  interest,  such  as  that  of  a  mortgagee. 

CONTRIBUTION 

Old  N.  Y.  Standard.  ''This  Company  shall  not  be  liable 
under  this  policy  for  a  greater  proportion  of  any  loss  on 
the  described  property,  or  for  loss  by  and  expense  of  re- 
moval from  premises  endangered  by  fire,  than  the  amount 
hereby  insured  shall  bear  to  the  whole  insurance,  whether 
valid  or  not,  or  by  solvent  or  insolvent  insurers,  covering 
such  property." 

New  N.  Y.  Standard.  ''This  company  shall  not  be  liable 
for  a  greater  proportion  of  any  loss  or  damage  than  the 
amount  hereby  insured  shall  bear  to  the  whole  insurance 
covering  the  property,  whether  valid  or  not  and  whether 
collectible  or  not." 


THE    POLICY    CONTRACT  113 

This  change  is  somewhat  broader  in  scope  than  in  the 
old  form  and  is  in  part  intended  to  prevent  all  of  a  loss 
falling  on  one  or  more  companies  or  set  of  policies  when 
there  were  in  fact  other  companies  or  other  policies  covering 
the  property,  which,  due  to  breach  of  condition,  insolvency 
or  other  reason,  were  uncollectible. 

All  insurance  to  contribute  must  cover  the  same  INTER- 
EST, or  some  portion  thereof.  There  may  be  two  sets  of  poli- 
cies covering  the  same  property  that  would  not  contribute 
because  they  do  not  cover  the  same  interest ;  for  example, 
one  may  cover  on  building  for  the  owner  and  the  other  the 
mortgagee's  interest  as  such  in  said  building,  in  which  case 
neither  need  contribute  with  the  other:  Or  a  stock  of  goods 
may  be  covered  for  the  owner  under  one  policy,  and  the  own- 
er's interest  in  profits  thereon  may  be  covered  under  another 
policy,  neither  contributing  because  the  interests  are  separate 
and  are  insured  as  such. 

The  provision  that  all  insurance  must  contribute  "whether 
valid  or  not,  or  by  solvent  or  insolvent  insurers,'^  is  inserted 
because  without  such  a  provision  each  company, 
Validity;         to  a  certain  extent,  would  be  in  the  position  of 
Solvency  guaranteeing  the  indemnity  called  for  under 

all  other  policies  and  from  all  other  companies. 
For  example:  Assume  that  Company  *'A,"  Company  ''B" 
and  Company  *^Z"  each  issues  a  policy  for  $5,000  on  a 
building  on  which  thereafter  a  loss  of  $4,500  occurs;  assume 
also  that  at  the  time  of  fire  Company  *'A''  is  solvent  and 
its  policy  in  full  force  and  effect ;  that  the  policy  of  Company 
"B"  has  been  rendered  invalid  by  breach  of  some  condition 
not  present  in  the  policy  of  Company  '*A,"  and  that  Com- 
pany *'Z"  has  become  bankrupt  and  its  policy  is  worthless. 
In  such  case,  were  the  policies  of  Company  **B"  and  Com- 
pany ^*Z"  not  held  to  be  contributing  insurance,  the  entire 
loss  of  $4,500,  instead  of  only  one-third  that  amount,  would 
fall  on  Company  *'A,"  which  is  solvent  and  whose  policy  is 
liberal  in  its  cover.    This  would  be  manifestly  inequitable. 

**The  extent  of  the  application  of  the  insurance  under  this 
policy  or  of  the  contribution  to  be  made  by  this  Company  in 
case  of  loss,  may  be  provided  for  by  agreement  or  condition 
written  hereon  or  attached  or  appended  hereto. '* 

Th,is  condition  is  rarely  called  in  question.    Presumably  it 


114  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

was  inserted  in  order  to  provide  for  such  clauses  as  the 
Three-Fourths  Value,  the  Two-Thirds  Vacancy,  the  various 
Coinsurance  or  Average  Clauses,  and  others  that  may  have 
some  bearing  on  the  amount  which  the  individual  company 
shall  pay  under  certain  conditions,  yet  it  can  hardly  be  ques- 
tioned that  such  clauses  would  have  the  same  effect  in  the 
absence  of  this  provision. 

The  New  N.  Y.  Standard  policy  adds  to  the  quoted  clause 

the  following:    ^^And  any  other  agreement  not  inconsistent 

with  or  a  waiver  of  any  of  the  conditions  or  provisions  of 

this  policy. '^ 

SUBROaATION 

Old  N.  Y.  Standard.  ^^If  the  company  shall  claim  that  the 
fire  was  caused  by  the  act  or  neglect  of  any  person  or 
corporation,  private  or  municipal,  this  company  shall,  on 
payment  of  the  loss,  be  subrogated  to  the  extent  of  such 
payment  to  all  right  of  recovery  by  the  insured  for  the 
loss  resulting  therefrom,  and  such  right  shall  be  assigned 
to  this  company  by  the  insured  on  receiving  such  payment." 

New  N.  Y.  Standard.  ^^This  company  may  require  from 
the  insured  an  assignment  of  all  right  of  recovery  against 
any  party  for  loss  or  damage  to  the  extent  that  payment 
therefor  is  made  by  this  company. '  ^ 

The  common  law  gives  certain  rights   of  subrogation  to 
which  the  company  would  be  entitled  without  this  provision 
in  the  policy,  but  it  is  apparently  inserted  in 
Rights  order  that  such  rights  may  be  clearly  under- 

stood and  in  order  that  the  company  may  ob- 
tain subrogation  on  demand  without  resort  to  the  courts  to 
enforce  the  right  as  might  otherwise  happen  in  the  case  of 
an  obstinate  or  litigious  policj'^holder. 

The  cases  in  which  subrogation  is  usually  asked  are  those 
where  fire  is  thought  to  have  been  caused  by  sparks  from  a 
railroad  engine,  or  by  an  overloaded  electric 
Negligence  light  or  power  wire,  or  other  cases  where  negli- 
gence is  alleged,  or  where  the  insured  has  the 
right  of  recovery  from  a  third  party,  as  in  the  case  of  dam- 
age to  property  while  in  the  custody  of  a  common  carrier. 


THE    POLICY    CONTRACT  115 

For  the  reason  that  this  right  of  subrogation  is — or  may 
be — valuable  to  the  company,  the  insured  should  not  waive 

right  of  recovery  without  notice  to  the  com- 
Waiver  of  pany,  and  endorsement  of  the  policy,  for  there 
Recovery  is  danger,  under  certain  conditions,  that  such 

waiver  by  the  insured,  without  notice,  might 
be  held  to  be  concealment  of  a  material  fact  and  so  avoid  the 
policy,  particularly  since  most  organizations  prescribe  a 
charge  for  waiver  of  subrogation  on  the  part  of  the  company. 

The  endorsement  to  be  made  may  take  the  following  form : 

'*In  consideration  of  $ additional  premium 

notice   is    hereby   acknowledged    that    the    insured    has 

waived  the  right  of  recovery  from for  any 

loss  or  damage  by  fire  to  the  property  herein  described. ' ' 


CHAPTER   IX 

WAIVER  AND  ESTOPPEL  BY  AGENT 

Oral  Waiver — Knowledge  by  Agent — Acceptance  of 
Premium — Demand  on  Insured — Denial  of  Lia- 
bility. 

The  Old  New  York  Standard  policy  contains  the  following 
provision:   ''This  policy  is  made  and  accepted  subject  to  the 

foregoing  stipulations  and  conditions,  together 
Policy  with  such  other  provisions,  agreements,  or  con- 

Provision  ditions  as  may  be  endorsed  hereon  or  added 

hereto;  and  no  officer,  agent  or  other  represen- 
tative of  this  company  shall  have  power  to  waive  any  pro- 
vision or  condition  of  this  policy  except  such  as  by  the  terms 
of  this  policy  may  be  the  subject  of  agreement  endorsed  here- 
on or  added  hereto ;  and  as  to  such  provisions  and  conditions 
no  officer,  agent  or  representative  shall  have  such  power  or 
be  deemed  or  held  to  have  waived  such  provisions  or  condi- 
tions unless  such  waiver,  if  any,  shall  be  written  upon  or 
attached  hereto,  nor  shall  any  privilege  or  permission  affect- 
ing the  insurance  under  this  policy  exist  or  be  claimed  by  the 
insured  unless  so  written  or  attached.'^ 

The  New  New  York  Standard  policy  changes  the  phrase- 
ology to  read :  ' '  No  one  shall  have  power  to  waive  any  pro- 
vision or  condition  of  this  policy  except  such  as  by  the  terms 
of  this  policy  may  be  the  subject  of  agreement  added  hereto, 
nor  shall  any  such  provision  or  condition  be  held  to  be  waived 
unless  such  waiver  shall  be  in  writing  added  hereto,  nor 
shall  any  provision  or  condition  of  this  policy  or  any  for- 
feiture be  held  to  be  waived  by  any  requirement,  act  or  pro- 
ceeding on  the  part  of  this  company  relating  to  appraisal 
or  to  any  examination  herein  provided  for;  nor  shall  any 
privilege  or  permission  affecting  the  insurance  hereunder 
exist  or  be  claimed  by  the  insured  unless  granted  herein  or 
by  rider  added  hereto." 

Oral  Waiver.  The  manifest  purpose  of  this  provision  is  to 
make  it  impossible  to  orally  waive  any  condition  of  the 
policy;  in  other  words,  to  require  that  any  modification  of  the 

116 


WAIVER   AND   ESTOPPEL   BY    AGENT  117 

conditions  of  the  policy  must  be  in  writing.  Unfortunately 
the  courts  have  not  uniformly  so  construed  this  provision; 
there  are  circumstances  under  which  the  conditions  of  the 
policy  may  be  waived,  or  a  violation  thereof  tacitly  per- 
mitted, without  being  endorsed  thereon  in  writing. 

Without  attempting  to  cover  the  subject  in  much  detail  it 
may  prove  of  value  to  illustrate  briefly  some  of  the  views 
which  the  courts  have  taken  of  this  provision : 

Knowledge  by  Agent.  Knowledge  by  the  agent  of  the 
company  is  knowledge  by  the  company  itself.  When  an 
agent  issues  a  contract  of  insurance  he  is  presumed  to  waive 
any  violation  of  its  conditions  of  which  he  has  knowledge  at 
the  inception  of  the  policy.  Such  knowledge  by  the  agent 
will  ordinarily  be  knowledge  acquired  at  the  time  of  writing 
or  negotiating  the  insurance,  or  within  such  period  of  time 
that  the  knowledge  might  reasonably  be  presumed  to  be  fresh 
in  his  mind.  It  seems  improbable  that  he  could  be  charged 
with  knowledge  that  he  once  had,  long  before,  which  would 
ordinarily  pass  out  of  his  mind.  To  illustrate:  Knowledge 
of  other  insurance  existing  at  the  inception  of  the  policy 
would  be  tacit  permission  for  such  amount  of  other  insur- 
ance, although  not  for  a  greater  amount,  but  the  fact  that  a 
year  previously  the  agent  knew  that  the  insured  had  a  barrel 
of  gasoline  on  his  premises  would  not  be  held  to  be  a  waiver 
of  the  restriction  in  the  policy  against  keeping  gasoline. 

Knowledge  that  premises  were  vacant  at  the  inception  of 
the  policy,  or  that  mechanics  were  at  work  therein,  or  that 
manufacturing  had  ceased,  would  not  be  tacit  permission  for 
such  conditions  to  continue  indefinitely,  for  the  policy  per- 
mits them  for  a  certain  number  of  days  and  it  is  to  be  pre- 
sumed that  the  insured  will  comply  with  the  policy  conditions 
after  the  stated  time  permitted  has  elapsed. 

Knowledge  that  the  agent  acquired  after  the  issuance  of 
policy  of  a  violation  of  its  conditions  may  not  require  any 
action  on  his  part,  and  by  taking  no  action  he  may  not  waive 
any  defense  the  company  might  have,  but  it  is  certainly  safer 
to  recall  the  policy  unless  he  is  willing  to  waive  the  viola- 
tions. In  such  cases  he  should  not  serve  the  regular  cancel- 
lation notice,  for  that  might  operate  to  make  the  insurance 
valid  for  at  least  five  days,  unless  sooner  surrendered.  (See 
under  ** Cancellations*'  for  special  form  therefor). 


118  THE   AGENTS   KEY   TO   FIRE   INSURANCE 

Endorsement  or  correction  of  a  policy  with  knowledge  of  a 
violation  is  a  waiver  thereof  even  though  the  endorsement  or 
correction  made  has  no  bearing  on  such  violation. 

Accepting  Premium.  The  acceptance  of  the  premium  on  a 
policy  with  knowledge  of  a  violation  of  its  conditions  that 
would  be  a  bar  to  any  recovery  thereunder  would  be  a  fraud 
on  the  insured.  Therefore,  it  is  held  that  the  acceptance  of 
the  premium  under  such  conditions  would  operate  as  a 
waiver  of  such  violations,  thus  making  the  policy  valid  as 
to  those  particular  violations. 

Failure  to  Inquire.  There  has  been  some  endeavor  to  hold 
that  failure  to  inquire  of  the  insured  if  there  is  any  violation 
of  any  of  the  conditions  of  the  policy  is  a  waiver  of  such 
violation  as  may  exist  at  the  inception  of  the  policy,  but  this 
seems  to  be  very  far  fetched. 

Demand  Upon  Insured.  Demand  upon  the  insured  after  a 
loss,  whether  for  the  premium  or  for  some  action  on  his  part, 
with  knowledge  of  a  defense  to  his  claim,  is  or  may  prove  to 
be  a  Avaiver  thereof. 

Denial  of  Liability.  A  general  denial  of  liability  under  a 
policy  gives  the  insured  immediate  right  of  action  at  law  to 
recover  the  amount  of  loss  without  compliance  with  the  con- 
ditions of  the  policy  as  to  the  filing  of  proofs,  etc. 

A  Word  of  Caution.  It  will  be  seen  from  the  foregoing 
that  care  should  be  exercised  by  the  agent  that  no  action  of 
his  shall  jeopardize  any  of  the  rights  of  his  Companies.  He 
is  given  broad  latitude  in  drawing  forms  and  making  en- 
dorsements that  will  maintain  the  policy  as  a  valid  contract, 
but  when  a  fire  occurs  the  agent  should  consider  that  a 
proper  conception  of  his  duty  to  his  Company  will  not  per- 
mit him  to  take  any  action  that  will  waive  any  of  the 
Company's  rights,  no  matter  how  trivial.  The  agent  who 
does  so  knowingly  is  false  to  his  duty,  disloyal  to  his  Com- 
pany, and  untrue  to  the  high  standards  that  have  maintained 
the  American  Agency  System. 


CHAPTER  X 

SELECTION  AND  INSPECTION 

Selection — Principles  of  Underwriting — Law  of  Av- 
erage— Moral  Hazard — Temperamental  Hazard — 
Physical  Hazard — Heating — Chimneys — Lighting 
— Gas — Acetylene  and  Gasoline — ICerosene  Oil 
Lamps — Electricity — Power — Gas  and  Gasoline 
Engines  —  Machinery  —  Housekeeping  —  Watch- 
man— Exposure. 

The  responsible  and  conscientious  agent  will  not  knowingly 
commit  his  company  on  a  risk  of  doubtful  character;  there- 
fore, where  a  doubt  exists  regarding  the  per- 
Selection  sonal  attributes  of  the  proposed  insured,  and 

his  trustworthiness,  it  is  wise  to  avoid  insur- 
ing him.  Likewise,  if  the  physical  hazards  are  extreme,  either 
structurally,  in  processes,  or  by  reason  of  poor  care,  the  risk 
is  one  to  avoid  at  least  until  it  is  submitted  to  and  approved 
by  the  company  or  one  of  its  field  men. 

In  order  to  know  what  business  is  likely  to  prove  profitable 
the  agent  should  have  some  understanding  of  the  primary 

rules  which  govern  underwriting.  These  are 
Principles  of  not  so  hard  to  define,  but  in  their  practical 
Underwriting     application  to  the  daily  questions  that  arise  in 

accepting  or  declining  business  lie  all  the 
problems  of  the  underwriter,  and  here  is  where  judgment,  ex- 
perience, information  and  *^ horse  sense''  count  for  so  much. 

The  systematic  application  of  the  law  of  average  is  the 
foundation  stone  of  underwriting.    In  any  such  system  that 
which  is  unusual  or  abnormal  is  likely  to  dis- 
Law  of  turb  the  balancing  of  the  various  elements.    As 

Average  applied  to  insurance  this  leads  to  the  conclu- 

sion that  risks  which  are  average  in  character 
are  likely  to  produce  average  results,  and  in  proportion 
as  they  depart  from  the  average  the  more  likely  are 
they  to  upset  the  system.  This  is  well  illustrated  in 
the    operations    of    life  companies    who    decline    to    insure 

119 


130  THE  AGENTS   KEY   TO   FIRE  INSURANCE 

those  who  do  not  measure  up  to  a  certain  fixed  standard.  It 
is  because  of  this  principle  that  abnormal  or  unknown  hazards 
or  unusual  conditions,  not  of  the  customary,  ordinary, 
average  character,  are  avoided  so  far  as  possible  by  j^ood 
underwriters.  Risks  which  are  better  than  average  are  natu- 
rally to  be  sought,  but  when  below  standard  they  should  be 
written  cautiously  and  for  small  lines  if  at  all.  The  question 
of  determining  whether  or  not  a  risk  is  aver- 
Average  age  is  considered  in  relation  to  the  class  where- 

Risk  in  it  falls,  both  as  to  moral  and  physical  haz- 

ard. A.  standard  for  dwellings  would  not  be 
applicable  to  stores  or  machine  shops;  likewise  ownership, 
construction  and  encumbrances  satisfactory  as  to  one  class 
would  not  be  as  to  all  classes.  ^* Average  for  the  class"  is  a 
term  in  common  use  among  underwriters,  and  carries  its  own 
definition.  For  example,  it  is  not  unusual  to  find  frame  dwell- 
ing properties  encumbered  for  more  than  50%  of  their  value, 
and  in  well  settled  localities  these  would  usually  be  con- 
sidered average  dwelling  risks;  but  a  country  grist  mill 
equally  encumbered  would  not  be  usual.  Soda  fountain 
fixtures  are  so  often  chattel  mortgaged  to  the  manufacturer 
that  it  is  usual  to  the  class,  but  a  clothing  or  similar  stock 
chattel  mortgaged  is  unusual  and  as  a  rule  is  a  risk  to  be 
avoided. 

What  is  true  as  to  risks  is  also  true  as  to  lines,  for  these 
need     to     be     average     in     amount     since     an     abnormal 

line  may  mean  an  abnormal  loss;  they  vary  in 
Average  amount  with  the  class  and  character  of  risk, 

Lines  large  amounts  being  average  lines  in  one  case 

or  class  while  small  amounts  are  in  others.  As 
an  example  of  these  extremes  may  be  cited  the  fireproof 
warehouse  and  the  frame  planing  mill  with  boiler  inside. 

When  applying  this  question  of  average  to  the  writings  of 
individual  companies,  the  broad  principles  are  alike,  but  the 
underwriting  practices  of  companies  differ  radically  in  many 
ways.  What  is  abnormal  for  one  is  normal  for  another.  A 
jumbo  line  for  one  is  an  average  line  for  another.  Some 
companies  seek  lines  on  a  given  class  which  other  companies 
decline  altogether.  A  company's  policy  in  the  general  ac- 
ceptance of  business  is  its  individual  system  for  obtaining  an 
average,  based,  usually,  upon  its  individual  experience;  if  it 
writes  all  classes,  then  as  to  classes  nothing  is  unusual  or  ab- 
normal, and  the  problem  of  its  underwriters  then  beeonies 
that  of  escaping  so  far  as  possible  risks  that  are  abnormal  or 


SELECTION    AND    INSPECTION  121 

unusual    within    the   individual    classes   wherein    they   fall, 
whether  from  moral  or  physical  standpoint. 

It  would  be  vain  to  think  it  possible  that  so  short  an  ex- 
position of  the  principles  of  underwriting  could  cover  a  sub- 
ject of  such  importance  and  complexity;  all  that  is  sought  is 
to  give  an  indication  of  their  nature  sufficient  to  serve  in 
some  measure  as  a  guide  toward  the  paths  of  knowledge. 

It  is  not  to  be  expected  that  an  agent  can  do  all  of  the 
underwriting  for  each  of  the  companies  which  he  represents, 

whether  in  the  selection  of  risks  or  the  fixing 
Agent's  of  lines;  but  his  power  to  bind  his  company 

Underwriting    is  so  broad,  and  the  length  of  time  which  may 

elapse  before  a  line  he  reports  can  be  passed 
on  at  the  company 's  office  is  often  so  long,  that  it  is  necessary 
for  him  to  know  in  a  general  way  what  to  write  and  for 
what  amounts,  else  he  may  commit  his  company  for  a  loss 
that  should  have  been  avoided,  or  for  an  amount  far  in  excess 
of  the  natural  or  average  line.  If  he  is  in  doubt  as  to  the 
company's  view  on  any  individual  risk,  as  to  either  line  or 
class,  he  had  best  submit  same  before  binding  the  company. 
Brief  treatment  of  the  subjects  of  moral  and  physical  hazards 
is  given  here,  but  the  individual  companies  represented  must 
guide  the  agent  in  fixing  their  own  lines  and  in  defining  the 
classes  which  they  will  write. 

MORAL  HAZARD 

By  this  is  meant  personal  character,  integrity,  solvency 
and  habits  of  life,  and  all  that  goes  to  make  one  worthy  of 
confidence.  The  primary  rule  is  not  to  insure 
Definition  unknown  persons  or  those  about  whom  positive 
information  is  lacking.  It  is  a  pretty  difficult 
thing  for  any  one  to  say  definitely  * '  there  is  a  moral  hazard, ' ' 
but  there  are  certain  conditions  which  general  experience 
shows  are  calculated  to  induce  or  lead  to  moral  hazard.  A 
few  of  them  may  be  cited  by  way  of  example: 

Stores  and  factories  that  are  not  doing  well,  or  that  have 
an  undue  quantity  of  shopworn,  out  of  date,  or  otherwise 

unsalable  goods,  or  old-fashioned  equipment; 
What  saloons,  distilleries  or  breweries  standing  idle 

to  Avoid  and    unused    for    a    long    time,    road    houses 

with  an  unenviable  reputation;  nuisances  of  all 
kinds;  factories  that  are  poorly  located  as  to  transportation 
facilities  or  not  adapted  to  the  kind  of  manufacturing  done  or 


i'Z:i  TilE   AGENTS   KEY   TO   FIRE   INSURANCE  , 

i 

processes  carried  on  or  where  labor  troubles  are  frequent; 
experimental  undertakings;  industries  depending  for  profit 
on  the  ownership  of  patents  in  litigation  or  about  to  expire; 
houses  in  changing  or  deteriorating  locations  likely  to  become 
unsuitable;  country  school  houses  inconveniently  situated; 
old-fashioned  buildings  used  perhaps  for  elevators  or  cold 
storage  plants  that  find  it  hard  to  compete  with  modern  ones ; 
enterprises  carried  on  by  agents,  such  as  a  man  operating  in 
the  name  of  his  wife  or  someone  else;  any  business  that  is 
"petering  out."  Any  of  these  and  many  others  that  might 
be  enumerated  presents  abnormal  conditions,  and  should  be 
carefully  investigated  before  insurance  thereon  is  accepted. 
Where  a  person  would  profit  by  a  fire,  either  in  ridding  him 
of  something  that  he  does  not  want,  or  in  selling  to  the  in- 
surance company  property  that  is  unsalable  to  any  one  else 
at  anything  like  the  same  price,  then  a  motive  is  furnished 
for  having  a  fire,  and  such  a  risk  is  to  be  avoided  unless  the 
moral  hazard  is  beyond  question,  or  the  condition  a  tempo- 
rary one.  Over-insurance  is  considered  to  be  one  of  the 
greatest  causes  of  the  so-called  moral  hazard  fires,  and  the 

fixing  of  a  proper  amount  of  insurance  is  one 
Over-  of  the  most  important  duties  and  responsibili- 

Insurance         ties  of  the  agent.     A  policy  should  never  be 

written  for  an  amount  in  excess  of  the  value 
of  property  covered,  except  temporarily  as  in  cases  where  a 
building  is  being  erected,  or  a  stock  of  goods  is  being  put  in, 
or  values  are  increasing  so  rapidly  that  they  cannot  be  closely 
determined,  or  in  similar  instances. 

There  is  another  side  to  moral  hazard  which  is  sometimes 
called  temperamental  hazard,  and  might  perhaps  be  other- 
wise   termed    congenital    carelessness.      There 
Tempera-  are  some  industries  which  have  notoriously  bad 

mental  housekeeping  conditions  due  to  a  variety  of 

Hazard  reasons,  sometimes  to  the  class  of  men  engaged 

in  them  or  to  the  class  of  labor  employed. 
There  are  also  certain  races  which  seem  always  to  live  in 
squalor,  whose  factories  and  stores  are  dirty  and  ill-kept, 
and  their  homes  likewise.  They  are  careless  with  their  heat- 
ing and  lighting  appliances,  their  stoves,  stove  pipes  and  flues, 
ashes  and  rubbish,  and  in  many  other  ways,  so  that  fires  are 
more  frequent  among  them  than  among  races  where  such 
conditions  do  not  exist,  or  at  least  are  unusual. 


SELECTION.  AND    INSPECTION  123 

A  bad  moral  hazard  is  a  menace  not  only  to  the  property 
owned  by  the  individual,  but   also   to   others  who  may  be 
tenants   in   the   same   or'  adjoining   premises; 
Omnibus  that  is  one  of  the  reasons  why  an  omnibus 

Risks  (several  tenant)   occupancy  is  usually  consid- 

ered less  desirable.  It  is  difficult  to  make  sure, 
with  the  changes  of  tenants,  that  someone  of  an  untrust- 
worthy character  will  not  slip  in  and  constitute  a  potential 
danger,  moral,  physical,  or  both,  to  the  property  of  all  the 
tenants  in  the  building. 

Not  all  successful  men  are  good  moral  hazards,  nor  all  un- 
successful or  unfortunate  ones  bad  moral  hazards;  personal 

character  counts  above  all.  Yet  sometimes  a 
Environment     man  essentially  honest  is  so  unlucky  as  to  be  a 

poor  insurance  risk.  There  is  usually  some 
underlying  reason,  however,  in  environment,  or  class  of  help 
employed,  or  method  of  operation;  and  many  companies,  on 
general  principles,  avoid  insuring  those  who  have  had  two  or 
more  fires,  except  where  they  were  unimportant,  or  the  in- 
sured were  large  owners  of  scattered  properties. 

Two  Classes.  There  are  really  two  classes  into  which  moral 
hazard  as  distinguished  from  physical  hazard  may  be  divided. 

First : — That  which  has  to  do  with  arson,  incendiarism,  the 
procuring  of  fires  or  intentional  carelessness  which  invites 
fires,  or  after  the  fire  the  making  of  dishonest  and  fraudulent 
claims,  or  the  increasing  of  a  loss  by  active  means  or  inten- 
tional neglect  of  the  property  damaged.  <i| 

Second : — The  things  which  are  temperamental  with  the  in- 
sured or  his  surroundings  or  employees,  that  are  expressed  in 
poor  housekeeping,  carelessness  in  removing  rubbish,  in  mak- 
ing needed  repairs,  in  caring  for  protective  appliances,  or  in 
prohibition  of  smoking,  and  in  general  the  neglect  of  main- 
taining property  in  good  condition  and  in  a  state  of  cleanli- 
ness, particularly  in  those  essentials  which,  when  neglected, 
tend  to  breed  fires. 

INSPECTION 

The  hazards  connected  with  manufacturing  processes,  par- 
ticularly where  chemicals  are  used,  call  for  specialized  knowl- 
edge, and  volumes  may  be  written  without  ex- 
Physical  hausting  the  field  of  inquiry.  The  physical 
Hazards  hazards  with  which  every  insurance  man  is 
expected  to  be  familiar  are  those  that  may  be 
termed  the  common  hazards,  viz.,  those  connected  with  heat, 


124:  THE  AGENTS   KEY   TO   FIRE   INSURANCE 

lig:lit  and  power,  and  conditions  of  housekeeping^;  for  tlie 
safeguarding  of  these  will  remove  the  most  prolific  causes  of 
fires. 

Heating.  Boilers,  furnaces,  and  stoves  not  set  on  legs 
should  have  incombustible  foundations,  and  should  be  far 
enough  from  wood  work,  or  other  combustible  material,  so 
that  it  will  not  scorch.  The  space  necessary  varies  from  6 
inches  to  6  feet  in  ordinary  cases.  Where  set  on  wood  floors 
without  legs,  a  proper  foundation  should  be  provided.  This 
may  consist  of  a  layer  of  tin  or  sheet  metal  or  asbestos  over 
the  floor,  covered  with  4  inches  of  masonry  set  in  cement 
mortar.  Hollow  terra  cotta  is  recommended,  so  laid  as  to 
obtain  a  circulation  of  air  between  the  top  surface  and  the 
floor.  Brick  may  be  used  and  will  serve  equally  well  if  the 
degree  of  heat  is  not  too  great.  •  Ordinary  stoves  and  ranges, 
set  on  legs  on  wood  floors,  should  have  tin  or  zinc  underneath, 
extending  at  least  12  inches  in  front  and  at  sides  of  hearth 
and  not  less  than  4  inches  elsewhere.  The  old-fashioned  sand 
box  with  4  inches  of  fine  sand  therein  is  usually  safe  but 
unsanitary.  Stove,  smoke,  and  heat  pipes  need  to  be  insu- 
lated from  woodwork,  especially  where  pass- 
Pipes  ing  through  floors  or  partitions.  Ventilated 
metal  shields  or  thimbles,  such  as  any  good 
tinsmith  can  make,  providing  an  inch  clearance  will  be 
sufficient  for  the  pipe  from  an  ordinary  stove,  but  larger 
pipes  require  greater  protection  up  to  the  standard  of  three 
feet  or  more  of  clearance  for  boiler  smoke  flues.  Smoke  pipes 
should  not  pass  through  closets  or  enter  chimney  in  attic  or 
unused  room,  and  should  always  be  securely  fastened  in  place 
by  wiring  or  metal  supports  or  devices.  Smoke  pipes  should 
enter  chimney  horizontally,  those  entering  vertically  being 
usually  unsafe.  Instead  of  ventilated  metal  shields  for  pro- 
tection against  excess  heat,  it  is  usually  satisfactory,  where 
feasible,  to  use  metal  lath  and  three-quarter  inch  of  good 
cement  plaster,  or  a  layer  of  plaster  board  covered  with 
metal,  or  cellular  asbestos.  All  shields  should  have  an  air 
space  between  the  heat  and  the  surface  protected. 

Hot  air  pipes  usually  need  a  minimum  of  six  inches  clear- 
ance from  unprotected  woodwork,  or  half  that  distance  if  in- 
sulated by  a  ventilated  metal  shield;  a  lesser  distance  may 
be  unsafe;  they  should  have  a  ventilated  thimble  where  pass- 
ing through  floor  or  partition. 


SELECTION    AND    INSPECTION  125 

Hot  air  blowers  should  be  kept  clcau,  well  oiled  and  run- 
ning true,  and  if  in  a  separate  room  it  should  be  kept  free 
from  rubbish   or   combustible   material.     The 
Blowers  intake  should  be  supplied  by  air  from  outside 

through  a  screened  opening.  A  fire  occurring 
in  the  vicinity  of  the  blower  may  be  distributed  to  the  entire 
building;  hence  the  necessity  for  care  and  cleanliness. 

Steam  or  hot  water  pipes  should  be  securely  hung  on  metal 
supports  and  kept  at  least  1  inch  from  woodwork.     Where 

passing  through  floor  or  partition  they  should 
Steam  and  be  provided  with  a  metal  collar  or  bushing  one 
Hot  Water  inch  larger  in  diameter  than  the  pipe.  All 
Pipes  combustible  material  should  be  kept  away  from 

pipes,  and  in  dry  rooms  they  should  be  screened 
so  that  nothing  may  fall  on  them  which  might  ignite.  Many 
people  laugh  at  the  danger  of  steam  pipes  touching  wood- 
work, and  do  not  believe  there  is  any.  There  are,  however, 
many  cases  on  record  where  the  wood  has  gradually  charred 
and  carbonized,  and  finally  taken  fire.  This  occurs  more 
frequently  in  dry  rooms  than  in  places  where  there  is  a  circu- 
lation of  air.  Steam  and  hot  water  pipe  coverings  should 
be  of  incombustible  material;  hair  felt  is  not  suitable  and 
probably  asbestos  is  the  best  of  all  coverings  made. 

Chimneys.  Wherever  possible,  these  should  be  built  from 
the  ground  and  support  their  weight  on  their  own  foundations, 
since  those  so  built  are  less  liable  to  crack.  The  exception  to 
this  is  where  no  stable  foundation  can  be  secured.  Those 
resting  on  floors,  beams  or  brackets  may  be  safe,  but  are 
more  likely  to  go  wrong,  while  those  hung  from  wooden  raft- 
ers are  usually  dangerous.  A  standard  chimney  for  ordinary 
uses  is  one  built  of  one  course  of  brick  on  side,  i.  e.,  flat, 

and  lined  with  1-inch  hard  burned  terra  cotta 
Standard  or  fire  clay  flue  lining  set  in  cement  mortar 

with  joints  struck  smooth.  If  not  lined,  the 
walls  should  be  8  inches  thick  instead  of  4  inches.  If  built 
of  stone  the  walls  should  be  not  less  than  8  inches  thick  and 
lined.  Cobble  stone  chimneys  should  be  not  less  than  12 
inches  thick  and  lined.  Tile,  clay,  or  concrete  block  chimneys 
are  unsafe,  since  they  are  liable  to  crack.  Reinforced  con- 
crete chimneys  with  standard  flue  lining  are  permissible,  aliBO 


126  THE  AGENTS   KEY   TO   FIRE   INSURANCE 

chimneys  built  of  reinforced  concrete  blocks  properly  made 
(flues  lined),  but  no  material  is  so  suitable, 

Concrete  durable,  and  safe  as  brick.     Chimneys  should 

be  kept  in  good  repair  and  properly  pointed  up, 

and  should  be  cleaned  once  a  year,  or  oftener  if  required  by 

the  fuel  used. 

Lighting.  The  chief  dangers  from  lighting  by  ordinary  city 
gas  lie  in  the  possibility  of  the  open  flame  coming  in  contact 

with  combustible  material.  No  gas  bracket 
Q-aa  should  be  closer  than  3  feet  to  the  ceiling,  or 

18  inches  if  latter  is  protected  with  ventilated 
shield.  Stationary  brackets  are  preferable,  but  if  swinging 
fixtures  are  necessary  they  should  be  arranged  so  that  contact 
with  woodwork  or  other  combustible  material  is  impossible. 
This  may  be  accomplished  by  suitable  stops,  or,  sometimes, 
by  a  globe  or  wire  cage.  Protection  around  the  open  flame  is 
desirable  in  dwellings  and  stores,  where  window  hangings  may 
otherwise  blow  against  the  flame.  Rubber  tubing  may  be 
used  for  lamps;  but  stoves,  glue  pots,  brazing  devices,  etc., 
should  have  only  metal  connections  and  be  set  on  metal,  and 
should  be  fastened  in  place,  particularly  those  standing  on 
the  floor  where  they  are  likely  to  be  moved  slightly  in  sweep- 
ing, and  the  joints  become  loose. 

Such  systems  should  only  be  installed  where  the  devices  are 
approved  by  the  National  Board,  and  are  put  in  place  by 

competent  mechanics  in  accordance  with  the 
Acetylene  manufacturers'  instructions.  The  same  dan- 
and  gers  exist  as  with  gas  jets,  and  the  same  pre- 

Gasoline  cautions  should  be  taken.    The  chief  danger  in 

the  use  of  these  systems  lies  in  having  gasoline 
and  carbide  about,  with  all  the  possibilities  that  follow  in 
their  train.  It  takes  intelligence  and  some  experience  to 
properly  operate  these  systems,  particularly  when  something 
goes  wrong  with  them,  and  they  are  too  often  left  in  the  care 
of  servants.  An  astonishing  number  of  fires  occur  through 
hunting  with  an  open  light  or  matches  for  a  leak  in  the  gas 
pipe.  Every  householder  will  find  it  useful  to  have  a  portable 
electric  light  for  emergencies  of  this  kind,  and  for  con- 
venience when  other  lighting  systems  fail. 


SELECTION    AND   INSPECTION  127 

Metal  lamps  and  lanterns  are  preferable  to  those  of  glass, 
since  the  latter  may  crack  or  may  fall  and  break.     Lamps 

should  be  filled  in  daylight  only.  The  same 
Kerosene  protection  is  necessary  as  with  gas  jets,  particu- 
Lamps  larly    overhead.      Hanging    screws    sometimes 

heat  and  pull  out.  Central  draft  lamps  are 
usually  dangerous  to  use,  and,  if  installed,  great  care  should 
be  given  to  keep  them  clean,  particularly  inside  the  burner, 
and  the  wick  well  trimmed. 

This  is  the  safest  form  of  lighting  when  properly  installed 
and  maintained  in  accordance  with  the  National  Code.  The 
size  of  wires,  the  spacing,  the  load,  the  fuses 
Electricity  and  cut  outs,  switches,  etc.,  call  for  the  serv- 
ices of  an  expert.  When  inspection  discloses 
the  use  of  wooden  cleats,  or  when  wires  are  hung  on  nails  or 
other  than  approved  supports,  or  pass  through  walls  or  par- 
titions or  around  corners  without  proper  bushing,  or  if  insu- 
lation is  worn  off  or  abraded,  then  it  is  desirable  to  have  the 
equipment  gone  over,  and  conditions  corrected  that  are 
likely  to  prove  unsafe  if  neglected. 

Power.  High  pressure  boilers  for  making  steam  to  run  en- 
gines that  furnish  power  use  more  fuel,  generate  more  heat 
and  need  greater  clearances  and  more  safeguards  than  low 
pressure  heating  boilers.  There  should  be  as  little  combust- 
ible material  in  the  boiler  room  as  possible; 
Boilers  sweepings  and  refuse  should  not  be  kept  there, 

but  burned  at  once  or  stored  outside,  preferably 
in  a  fireproof  bin  cut  off  from  the  boiler  room.  Where  wood 
is  burned,  the  boiler  stack  should  have  an  approved  spark 
arrester.  Soft  coal  is  liable  to  spontaneous  combustion  and 
should  not  be  kept  in  large  quantities  in  or  too  near  building. 

Gravity    feed    is    to    be    avoided.      Mufflers 

Gas  and  should  be  located  at  least  12  inches  from  wood- 

Grasoline  work,  and  the  exhaust  pipe  extended  outside 

Engines  and  kept  at  least  6  inches  from  woodwork;  it 

should  be  supported  firmly  in  place. 

The  hazard  of  running  machinery  comes  chiefly  from  the 

danger  of  overheated  bearings,  and  from  oil  and  waste,  of 

combustible    material,    being    allowed    to    ac- 

Machinery       cumulate.     Shafting  should  be  well  hung  and 

run  true,   and  bearings   self  oiling   and  kept 

clean.     Where  machines   make   combustible  litter,   such   as 


128  TPIE  AGENTS   KEY   TO   FIRE   INSURANCE 

planers,  buffers,  etc.,  a  blower  system  should  be  installed 
where  feasible,  and  the  waste  discharged  outside  away  from 
the  building,  or  into  a  fireproof  vault. 

HOUSEKEEPING 

Care  and  cleanliness  are  the  *  *  firgt  aids ' '  to  fire  prevention. 
The  finest  construction,  the  best  installed  equipments,   the 

most  approved  protective  devices,  all  fail  un- 
Care  and  less  they  are  maintained  in  good,  workable  con- 

Cleanliness       dition,   and  the  premises  free  from  dirt   and 

rubbish.  Carelessness  is  the  cause  of  more  fire 
losses  than  poor  construction,  non-standard  equipment,  or 
lack  of  protection.  The  poor  physical  risk  in  the  hands  of 
good  housekeepers  is  often  a  better  fire  risk  than  one  that 
is  fine  physically  but  poorly  managed.  The  type  of  man  who 
goes  all  over  his  premises  before  leaving  them  at  night,  and 
who  never  retires  without  looking  at  the  furnace  to  see  that 
everything  is  all  right,  is  the  type  that  has  few  fires.  Among 
the  things  which  may  be  specifically  referred  to  in  connec- 
tion with  good  housekeeping  are  the  following: 

Ashes: — Should  be  kept  in  metal  cans — never  in,  on  or  against 
wood. 

Rubbish: — Should  not  be  allowed  to  accumulate.  Papers, 
packing  materials,  broken  things,  empty  cases  and  need- 
less combustible  articles  should  be  removed  daily. 

Oily  Waste  and  Rags: — These  are  liable  to  ignite  spontane- 
ously, and  should  never  be  thrown  in  corners  or  closets, 
or  left  lying  on  floor;  if  kept  in  cans,  the  latter  should 
be  of  approved  metal  and  be  emptied  daily. 

Waste  (Ordinary) : — Should  be  kept  in  approved  metal  cans. 

Oils  and  Grease: — Only  a  working  supply  should  be  kept  in- 
side main  buildings,  and  should  have  approved  metal 
pans  to  catch  drippings.  These  should  be  cleaned  fre- 
quently. 

Matches: — The  ordinary  parlor  match  is  dangerous.  Many 
fires  are  caused  by  its  use;  women  and  children  are 
often  badly  burned  by  match  heads  flying  off  and  catching 
in  clothes.  The  so-called  safety  match — striking  on  the 
box — is  the  best  type  for  use  in  house,  store  or  factory. 


SELECTION  AND  INSPECTION  139 

Protective  Equipment: — Oftentimes  valuable  appliances  are 
installed  which  would  be  of  great  aid  in  putting  out  a 
fire,  but  are  so  poorly  cared  for  that  when  the  emergency 
arises  they  are  practically  useless.  An  empty  fire  pail 
is  worse  than  none.  Sand  and  fire  pails  should  be  kept 
full,  chemical  extinguishers  recharged  as  per  directions, 
hose  examined  periodically  to  see  that  it  is  in  good  condi- 
tion for  use,  fire  doors  maintained  in  free  working  order, 
tanks  kept  full,  fire  pumps  tested  regularly,  and  the 
sprinkler  equipment  maintained  in  full  working  order  in 
accordance  with  directions  that  are  usually  furnished 
when  same  is  installed. 

Watchman.  The  only  way  to  be  reasonably  sure  that  the 
watchman  makes  his  rounds  regularly  is  to  have  a  proper 
clock  installed,  and  to  check  up  the  records  every  day  to  see 
that  the  punching  of  the  different  stations  is  recorded  in  due 
order  and  at  proper  times. 

Inspections.  The  best  way  to  insure  the  care  of  protective 
devices  is  to  have  a  regular  time  for  inspections,  and  to  hold 
responsible  the  man  whose  dutj'^  it  is  to  make  them. 

To  the  one  who  wishes  to  study  in  detail  the  various  mat- 
ters that  have  been  touched  upon  herein,  the  following  publi- 
cations are  recommended  for  perusal : 

The  National  Board  Building  Code. 
The  National  Electrical  Code. 

Standards  of  various  kinds  published  by  the  National  Board 
of  Fire  Underwriters,  New  York  City. 
National  Fire  Protection  Association  ''Field  Practice." 


EXPOSURE 

A  risk  is  usually  considered  unexposed  if  the  nearest  build- 
ing, structure  or  combustible  property  that  may  make  a  fire 

that  is  other  than  trivial,  is  100  feet  or  more 
Limit  of  distant.    This  does  not  mark  the  limit  of  dan- 

Danger  ger,  (sparks  or  brands  from  a  fire  have  been 

known  to  carry  several  miles  and  set  fire  to  a 
wooden  roof,  although  this  is  the  exception  that  proves  the 
rule),  and  many  things  must  be  taken  into  consideration  in 
fixing  a  safe  limit  in  specific  cases;  but  100  feet  is  generally 
accepted  as  a  safe  distance  on  the  average.  The  degree  of 
safety  depends  somewhat  on  the  construction  of  the  building 


130  THE  AGENTS    KEY   TO   FIRE   INSURANCE 

exposed,  and  on  the  construction,  area  and  contents  of  the 
exposure.     A   large   area   frame   building,    or 
Degree  of         brick    building   with    frame   roof,    filled    with 
Safety  highly  combustible  contents  such  as  hay,  fur- 

niture, etc.,  is  an  unsafe  exposure  at  a  distance 
of  100  feet,  particularly  if  the  exposed  building  has  a  wooden 
roof.  As  a  rule  the  distance  apart  may  be  decreased  with 
safety  in  ratio  with  the  improvement  in  construction,  and, 
also,  in  ratio  with  contents  which  burn  either  in 
Distance  a  flash  without  sustaining  combustion,  such  as 

millinery  stocks,  or  which  burn  slowly,  such  as 
piece  dry  goods.  Exposures  are  naturally  more  serious  when 
there  is  no  protection  against  fire,  and  the  distance  apart 
may  be  decreased  with  safety  in  ratio  with  the  degree  of  pro- 
tection. 

It  is  a  safe  rule  on  the  average  for  the  agent  to  decline  any 
business  located  within  100  feet  of  a  risk  that  his  company 
has  refused  to  write,  at  least  without  first  submitting  it  for 
approval.  Rating  authorities  are  giving  greater  attention  to 
exposure  than  ever  before,  for  it  is  realized  more  than  ever 
how  much  exposure  contributes  to  the  fire  cost  of  the  country. 
As  congested  values  increase  the  losses  due  to  exposure  are 
bound  to  increase,  for  all  fires  that  spread  from  the  building 
where  they  originate,  including  conflagrations,  are  chargeable 
to  exposure.  More  than  one-eighth  of  the  entire  fire  insur- 
ance losses  of  the  United  States  are  due  to  exposure  fires. 


CHAPTER  XI 

RATES  AND  RATING  METHODS 

Minimum  Rates — Spixific  Rates — Flat  Rates — Co- 
insurance Rates — Blanket  Rates — Average  Rates 
Floating  Rates  —  Judgment  Rates  —  Schedule 
Rates — Analysis  of  Rates. 

The  key  note  of  the  insurance  business  is  the  rate.  All 
other  things  revolve  around  that.    It  is  the  price  of  the  goods 

for  sale  and  familiarity  with  rates  and  the 
Rates  methods  by  which  they  are  made  is  desirable 

for  all  agents  and  a  prime  necessity  for  those 
in  the  larger  centers. 

Rates  are  commonly  designated  by  the  following  names: — 

Minimimi  rates,  being  those  made  for  and  applying  to  all 
risks  of  a  given  class,  such  as  dwellings,  where  no  specific 
rate  is  fixed. 

Specific  rates,  being  those  made  for  and  applying  to  a  given 
risk  or  property,  such  as  "Building,  24  Main  St." 

Flat  rates,  being  those  that  do  not  require  the  use  of  coin- 
surance. 

Coinsurance  rates,  being  those  requiring  the  use  of  coin- 
surance. 

Blanket  rates,  sometimes  called  Average  rates,  being  those 
applying  over  two  or  more  properties,  or  over  two  or  more 
subjects  of  insurance,  which  underwriting  rules  or  customs 
commonly  require  to  be  separately  insured,  whereas  such 
rates  are  made  so  that  these  properties  may  be  written  in 
one  item  without  separation.     (See  Blanket  Forms.) 

Floating  Rates,  being  those  applying  to  property  wherever 
located  within  the  general  confines  stated,  such  as  within  a 
given  State. 

Judgment  and  Schedule  Rates.  Rates  are  of  two  general 
kinds,  viz.,  JUDGMENT  and  SCHEDULE. 

131 


132  THE  AGENTS    KEY   TO   FIRE  INSURANCE 

Judgment  rates  are  those  made  without  the  use  of  any 
measure  beyond  that  which  the  experience,  intelligence  and 
good  sense  of  the  rate  maker  provides.    Years 
Judgment         of  observation  and  analysis,  and  the  impres- 
Rates  sions  constantly  received  in  the  daily  study  of 

construction,  hazards,  protection  and  environ- 
ment, give  to  the  underwriter  a  training  which  enables  him 
in  a  practical  way  to  judge  what  rate  a  given  risk  should 
bear.  Many,  particularly  of  the  older  school  of  underwriters, 
regret  the  passing  away  of  rate  making  by  judgment  and 
experience,  feeling  that  the  intuitive  sense  of 
Value  of  the  underwriter,  born  of  long  years  of  train- 

Experience  ing,  more  accurately  measures  the  worth  of  a 
risk  than  the  literal  application  of  rate  mak- 
ing schedules.  But  the  great  growth  in  property  values,  the 
complexities  of  our  modern  mercantile  and  manufacturing 
industries,  the  congestion  of  our  cities  and 
Schedule  towns,  the  different  methods  of  fire  protection, 

Rates  the  wealth  of  building  materials  formerly  un- 

known, the  great  development  in  mechanics, 
in  chemistry  and  in  all  the  arts  and  sciences,  has  rendered 
impracticable  the  making  of  rates  by  judgment  alone,  and 
this  evolution  of  general  business  conditions  has  brought 
about  rate  making  by  schedule,  which  method  is  rapidly  be- 
coming universal  throughout  the  United  States.  The  sched- 
ules used  are  not  in  themselves  based  upon  demonstrated 
costs,  but  their  base  rates,  charges  and  credits  are  founded 
upon  the  judgment  and  experience  of  many  trained  under- 
writers whose  minds  have  met  in  the  adoption  of  the  various 
items  of  said  schedules,  which  are  probably  as  accurate  as  it 
is  possible  to  produce  with  the  information  at  present  avail- 
able. These  schedules  are  really  measures  for  averaging  the 
rates  in  a  given  class,  and  for  this  purpose  are  superior  to 
judgment  ratings,  just  as  a  tape  line  is  better  than  pacing 
to  measure  distance. 

Two  general  systems  of  schedule  ratings  are  in  use  in 
the  United  States  to-day:    The  Universal  in  the  East,  and 

the  Analytic  or  Dean  in  the  West.  Each  starts 
Schedule  from  a  basis  rate  and  makes  charges  or  gives 

Systems  credits  for  the  various  items  that  go  to  make 

up  the  schedule  applying  to  the  particular  risk 
rated.  The  Universal,  in  the  main,  adds  flat  or  constant 
charges,  for  example,  10  cents  for  defective  flue;  whereas 
the  Dean  adds  a  percentage  of  the  basis  rate,  for  example, 


RATES  AND  RATING   METHODS  133  \ 

10  per  cent,  for  defective  flue.    Each  has  a  variety  of  sched-  j 

ules  or  of  occupancy  charges  adapted  for  use  in  rating  the  . 

various  classes  of  property,  it  having  been  found  that  no  j 

one   schedule   can   be   devised   that   is   practical   for   rating  i 

any  and  all  kinds  of  risks.  ] 

Analysis  of  Rates.     The  agent  in  analyzing  a  rate  on  a  ! 

given  risk  first  obtains  a  copy  of  the  schedule  used  and  the  i 

•'make-up"  of  the  rate,  by  which  is  meant  the  j 

Charges  various  charges  and  credits  which  produce  the  ! 

and  Credits      final  rate.     He  first  determines  whether  the  \ 

proper  schedule  has  been  used;  then  he  should  ■ 

learn  whether  the  charges  are  properly  made  and  if  credit  ! 

is  given  in  the  rate  for  everything  contained  in  the  risk  for  ! 

which  credit  is  provided  in  the  schedule;  next  he  should  see  i 

whether  improvements  can  be  made  that  will  result  either  in  j 

eliminating  charges,  or  result  in  further  credits  being  given,  i 

Charges  for  condition  or  housekeeping  should  come  in  for  ! 

special  attention  as  they  may  usually  be  removed,  and  their  \ 

correction  makes  for  the  safety  of  the  risk.    It  is  well  for  i 

the  agent  to  remember  that  his  renewal  commissions  depend  ; 

on  keeping  the  property  in  existence.  ■ 

Sometimes  a  judgment  rate  exists  on  a  risk,  or  only  a  mini- 
mum rate  applies,  and  it  may  be  found  by  inspection  and  the  i 

experimental  application  of  the  proper  sched- 

Which  ule  that  if  a  rate  is  made  thereunder  it  will  ; 

to  Apply  be  lower  than  the  judgment  or  the  minimum  | 

rate,  in  which  case  it  is  obviously  to  the  ad-  | 

vantage  of  the  insured  to  apply  for  the  promulgation  of  a  i 

schedule  rate.     The  agent  should  remember  that  it  is  his  j 

duty  to  secure  for  his  client  by  every  legitimate  means  the  j 

lowest  rate  possible,  and  that  his  competitors  j 

Rate  always  have  an  eye  out  for  some  way  of  re-  j 

Reductions       ducing  his  client's  rate   and  using  this  as  a  \ 

lever  for  prying  the  account  away  from  him.    A  '■ 

reduction  in  rate  usually  makes  a  louder  noise  than  the  note  ■ 

of  friendship,  and  the  agent  who  is  most  successful  in  legiti-  \ 

mately  saving  money  for  his  clients,  without  the  sacrifice  of  \ 

proper  coverage,  is  likely  to  be  the  one  who  has  the  biggest  I 

expiration  register.    A  thorough  knowledge  of  ! 

Knowledge  of    rates  and  rate-making  schedules — not  merely  j 

Rate  Making     a  superficial  one — ^vastly  increases  the  equip-  ■ 

ment   for   success   in   soliciting    and   holding  \ 

business,  and  giving  satisfactory  service.  ] 


CHAPTER  XII 

CANCELLATION  AND  SUBSTITUTION 

Policy  Ordered  Cancelled — Conditional  Order — 
Avoid  Reinstatement — Void  Policy — Notice  of 
Cancellation — Legal  Notice  and  Tender — Return 
Premium  Without  Deduction — Notice  to  Payee — 
Notice  to  Mortgagee — Substitution  or  Replace- 
ment— Binders — Cancellation    Notices    (Forms). 

CANCELLATIONS. 

An  agent  receiving  instructions  from  his  company  to  cancel 
a  i3olicy  must  use  every  reasonable  effort  to  promptly  effect 
cancellation;  and  failure  to  make  such  effort  renders  him 
personally  liable  for  any  loss  which  the  company  sustains 
because  of  his  neglect. 

Sometimes  a  company  asks  cancellation  con- 
Conditional  ditional  upon  certain  alleged  facts  proving  to 
Order  be  true,  or  certain  specified  things  taking  place. 

In  such  cases  the  agent  may  render  himself 
personally  liable  if  he  does  not  use  reasonable  diligence  to 
ascertain  the  truth,  or  the  occurrence  of  the  specified  hap- 
penings. 

Again,  the  company  may  instruct  agent  not 
Avoid  to  receive  the  premium  on  a  given  policy,  or 

Reinstating  not  to  endorse  or  correct  it,  or  not  to  grant 
further  permits,  as,  for  example,  a  vacancy 
permit.  Such  instruction  may  be  with  a  view  of  avoiding  any 
act  on  the  part  of  an  agent,  or  the  bringing  about  of  a  condi- 
tion, that  would  continue  a  policy  in  force  or  reinstate  one 
that  is  void. 

Where  a  policy  is  rendered  void  by  a  viola- 
Void  tion  of  some  condition  (for  example,  vacancy 
Policy  beyond  the  length  of  time  permitted),  and  such 
violation  comes  to  the  knowledge  of  the  agent, 
there  is  danger  that  it  may  be  claimed  the  violation  was 
waived  if  he  takes  no  action.  Hence,  in  such  cases,  unless 
permission  or  waiver  is  to  be  endorsed   on  the  policy,  or 

134 


CANCEIJ-ATION    AND    SUBSTITUTION  lo5 

would  be  if  presented,  the  policy  should  be  recalled,  and  the 
full  amount  of  unearned  premium  from  date  of  violation  re- 
turned to  the  insured,  thus  avoiding  all  possibility  of  trouble 
or  embarrassment  in  case  fire  occurs. 

When  recalling  a  void  policy  the  ordinary  notice  of  cancel- 
lation should  not  be  served,  for  to  do  so  might  be  held  to  re- 
vive the  policy  during  the  five  days  covered  by  said  notice. 
Notice  of  recall  may  be  in  form  similar  to  the  one  appended 
hereto. 

Notice  of  Cancellation.  The  policy  provides  that  either  the 
insured  or  the  company  may  cancel  it  by  giving  notice  in  ac- 
cordance with  its  conditions.  The  agent  may  give  or  receive 
notice  personally  or  by  mail,  or  through  a  representative,  such 
as  an  employee  or  solicitor  customarily  acting  for  him  in  such 
matters,  or  specially  instructed  or  authorized.  Likewise  the 
insured  may  give  or  receive  notice  personally,  or  by  mail, 
or  through  a  representative  such  as  an  employee,  agent  or 
broker.  The  important  thing  to  be  considered  here  is  can- 
cellation on  behalf  of  the  company,  and  it  must  always  be 
borne  in  mind  that  to  be  sure  of  a  legal  cancellation  the  com- 
pany must  be  in  position  to  prove  that  notice 
Proof  of  of  its  election  to  cancel  was  received  by  the  in- 

Notice  sured  or  his  authorized  representative.     Such 

Necessary        representative  must  have  the  authority  to  ac- 
cept notice  of  cancellation  on  behalf  of  the  in- 
sured else  it  will  not  be  legal  notice  to  the  insured.    If  a  paid 
employee  is  in  the  habit  of  ordering  and  cancelling  insurance, 
it  is  nsuallj'^  sufiicient  evidence  that  he  is  au- 
Receipt  by       thorized  by  his  employer  to  take  such  action. 
Employee         and  this  is  true  in  a  less  degree  of  an  agent  of 
or  Broker         the  insured,  such  as  one  handling  his  real  estate 
or  customarily  acting  for  him  in  his  absence. 
The  broker  is  sometimes  authorized  to  secure, — but  not  to 
cancel — insurance,  and  the  practice  of  sending  notice  to  the 
broker  may  result  in  cancellation,  but  cannot  be  depended 
upon  to  relieve  either  the  company  of  its  liability,  or  the 
agent  of  his  responsibility  for  cancellation. 

The  best  way  to  effect  cancellation  is  to  see  the  insured, 
get  him  to  acknowledge  the  cancellation  and  surrender  the 

policy,  but  if  this  cannot  be  done  the  conditions 
Legal  of  the  policy  (N.  Y.  Standard)  require  that  the 

Methods  insured   be  given   five   days'   notice,   and   the 

policy  is  not  cancelled  until  five  days  after  such 
notice  is  received  by  the  insured,  or  his  authorized  representa- 


136  THE  AGENTS   KEY   TO   FIRE  INSURANCE 

tive,  unless  in  the  meantime  he  surrenders  it.  If  notice  is 
to  be  given  it  should  always  be  in  writing  and  unequivocal  in 
its  terms.  This  notice  may  be  delivered  by  hand  or  sent  by 
registered  mail.    It  should  be  addressed  to  the  insured  at  his 

place  of  business,  or  an  address  where  he  is 
Address  known  to  receive  mail,  or  to  his  agent  if  he  is 

represented  by  one,  or,  if  deemed  proper  and 
necessary,  to  the  insured  in  care  of  his  broker.  A  duplicate 
or  facsimile  cop^  of  the  notice  should  be  kept  by  the  agent. 
If  notice  is  delivered,  memorandum  should  be  made  showing 
the  date  and  by  whom  the  delivery  is  effected  and  by  whom 
it  is  received.  If  sent  by  mail,  the  letter  should  be  registered 
and  copy  of  the  notice  marked  with  the  date  and  hour  of 

mailing,  and  kept  with  the  post  oflSce  receipt 
Registered  and  the  registry  return  card  when  it  comes 
Letter  back.     The  envelope  should  bear  the  imprint 

of  the  agent  issuing  the  policy,  or  representing 
the  company,  or  the  imprint  of  the  company  whose  policy  is 
being  cancelled.  This  is  imperative  by  reason  of  court  de- 
cisions. 

Since  notice  to  be  effective  must  reach  the  insured,  or  one 
authorized  to  act  for  him,  it  is  important  to  have  him  receive 

the  registered  communication,  and  that  the 
Proof  of  registry  return  card  bear  his  signature  or  that 

Receipt  of  his  authorized  representative.    Therefore,  it 

is  recommended  that  the  envelope  be  marked 
''Deliver  to  addressee  only — ^receipt  desired."  If  so  marked, 
the  post  office  rules  require  delivery  to  none  other  than  the 
addressee.  The  papers  usually  required  by  a  company  to 
constitute  a  voucher  for  a  cancellation  by  notice  are  a  fac- 
simile copy  of  the  notice  sent,  the  post  office  receipt  for 
registration  and  the  registry  return  card.  The  card  should 
bear  the  signature  of  the  insured  or  his  agent  or  representa- 
tive. If  the  insured  is  a  corporation  it  should  bear  the  signa- 
ture of  such  corporation  with  the  name  of  the  one  signing 
therefor. 

Where  the  premium  has  not  been  paid  no 
Premium  action    is    necessary    beyond    the    serving    of 

Paid  and  '  notice.  If  the  policy  is  in  the  old  New  York 
Unpaid  Standard  form  and  the  premium  has  been  paid 

it  is  rarely  safe  to  await  the  policy  before 
returning  the  unearned  premium,  even  though  it  is  custom- 
arily surrendered  promptly  and  return  premium  due  thereon 
is  paid,  for  it  has  been  held  that   the   cancellation  is   not 


CANCELLATION    AND    SUBSTITUTION  137 

effective  until  the  unearned  premium  has  been  actually  paid 
or  tendered  to  the  insured.    For  that  reason  it  is  wise  to  send 

with  the  notice  the  amount  of  unearned  premi- 
Returning  um  due.  As  a  matter  of  convenience  a  check 
Unearned  is  often  enclosed  with  the  notice  of  cancella- 
Premimn  tion  and  if  the  insured   endorses  and  cashes 

same,  that  is  acknowledgment  and  acceptance 
by  him  of  the  notice  of  cancellation  and  is  effective. 

To  be  absolutely  certain  of  effecting  and  proving  cancella- 
tion if  policy  is  in  the  old  New  York  Standard  form,  a 
written  notice  of  cancellation  should  be  handed  personally 

to  the  insured,  or  his  authorized  representa- 
Legal  tive,  in  the  presence  of  one  or  more  witnesses, 

Notice  accompanied    by    the    unearned    premium    in 

and  Tender      cash  that  is  legal  tender  of  the  United  States, 

as  the  insured  would  have  a  right  to  decline 
the  money  and  not  recognize  the  tender  if  it  were  otherwise 
than  legal  tender  so  designated  by  law.  Legal  tender  consists 
of  United  States  treasury  notes,  gold  coin  of  the  denomina- 
tion of  $1.00  or  over,  silver  dollars,  and  subsidiary  coin  for  a 
limited  amount.  It  is  best  to  use  the  least  number  of  pieces 
of  money  necessary  to  make  up  the  amount  of  the  tender, 
therefore,  to  use  gold  coin  or  silver  dollars  for  all  but  the 
fractional  parts  of  a  dollar,  for  which  silver  50c  and  25c 
pieces,  dimes,  nickels  and  pennies  should  be  used  in  the  least 
number  necessary  to  make  up  the  exact  amount.  By  avoid- 
ing the  use  of  paper  money  all  doubt  is  eliminated  as  to 
whether  the  money  is  legal  tender  (as  in  the  case  of  treasury 
notes)  or  whether  it  is  other  paper  money  of  similar  appear- 
ance such  as  silver  certificates,  gold  Certificates  and  national 
bank  notes,  none  of  which  is  legal  tender.     The  notice  and 

tender  should  be  handed  to  the  insured  or  his 
Service  authorized    representative    accompanied   by    a 

of  Notice  statement  as  to  the  nature  and  purpose  of  the 

and  Tender      communication  and  tender  and  if  possible  the 

copy  of  notice  should  be  read  to  him.  No  re- 
ceipt for  the  money  should  be  demanded.  The  notice  and 
money  once  having  been  delivered  or  offered  should  under 
no  circumstances  be  taken  back.  If  the  insured  declines  to 
receive  the  notice  or  the  tender,  either  or  both  should  be  laid 
in  as  convenient  a  place  for  him  as  possible  and  not  be  taken 
back  even  though  the  insured  goes  away,  leaving  the  money 
or  the  notice  untouched. 

The  New  New  York  Standard  form  obviates  the  difficulty 


138  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

regarding  the  return  of  une«irned  premiuui  at  the  time  of 
giving  notice,  for  it  provides  that  the  policy  shall  be  can- 
celled by  giving  the  insured  5  days'  notice,  ''with  or  without 
tender  of  the  excess  of  paid  premium  above  the  pro  rata 
premium  for  the  expired  time."  But  it  does  require  that 
said  excess  or  unearned  premium  if  not  tendered  shall  be 
refunded  on  demand. 

Return  Premium  Without  Deduction.  Return  of  the  un- 
earned premium  direct  to  the  insured,  whether  figured  pro 
rata  or  short  rate,  must  be  without  deduction  of  brokerage 
or  agent's  commission.  When  the  unearned  premium  is  re- 
turned through  the  medium  of  the  broker,  it  is  customary  to 
deduct  the  brokerage,  figuring  it  in  the  same  percentage  as 
the  brokerage  on  the  original  premium  (that  is,  10%,  15% 
or  other  percentage),  but  it  would  be  unsafe  to  deduct  this 
brokerage  if  there  is  likely  to  be  any  trouble  over  the  ef- 
fectiveness of  the  cancellation  and  the  prompt  surrender  of 
the  policy. 

Notice  to  Payee.  There  is  no  direct  provision  in  the  policy 
requiring  notice  to  be  given  the  payee  under  a  simple  loss 
payable  clause  reading,  ''Loss,  if  any,  payable  to 

as  interest  (or  as  mortgagee  interest)  may  appear." 

Courtesy  and  fairness,  as  well  as  custom,  do,  however,  de- 
mand the  giving  of  a  five  days'  notice  to  the  payee,  and  it  is 
quite  possible  that  the  courts  would  hold  that  the  cancellation 
of  a  policy  was  not  effective  if  notice  to  the  payee  was  not 
given. 

Notice  to  Mortgagee.    If  a  mortgagee  clause  is  attached, 
then  notice  to  the  mortgagee,  as  well  as  to  the  insured,  be- 
comes necessary  to  terminate  the  company's 
Cancellation    liability,  for  the  mortgagee  clause  in  its  terms 
is  a  separate  contract  requiring  a  separate  no- 
tice.   There  are  two  proAdsions  therein: 

A.  For  the  termination  of  the  mortgagee  interest  by  can- 
cellation of  the  policy. 

B.  For  the  cancellation  of  the  mortgagee  clause  itself. 
In  either  case  ten  days'  notice  instead  of  five  is  the  require- 
ment on  the  clauses  most  widely  used.  Usually  notice  of 
cancellation  of  a  policy  will  serve  to  terminate  the  interest  of 
the  mortgagee,  because  it  is  usually  followed  by  the  surren- 
der of  the  policy  and  the  substitution  of  other  insurance 
therefor,  but  the  safest  notice  to  give  is  for  the  cancellation 


CANCELLATION    AND    SUBSTITUTION  139 

of  the  mortgagee  clause  itself.  Such  notice  does  not  under 
ordinary  circumstances  require  to  be  accompanied  by  any 
tender  of  unearned  premium  and  its  sufficiency  does  not  de- 
pend on  the  cancellation  of  the  policy.  Indeed,  where  the 
insured  cannot  always  be  located,  or  difficulty  is  experienced 
in  serving  him  notice,  sometimes  the  burden  may  be  thrown 
upon  the  mortgagee  by  cancelling  the  mortgagee  clause,  thus 
inducing  him  to  insist,  as  he  has  a  right  to  do  under  his 
mortgage,  that  the  mortgagor  (insured)  secure  other  satis- 
factory insurance  payable  to  him  (mortgagee)  in  the  event 
of  loss. 

Substitution  or  Replacement.  When  a  policy  of  a  company 
is  to  be  cancelled,  unless  the  risk  is  deemed  undesirable  to 
handle,  the  agent  will  usually  wish  to  replace  the  policy  with 
that  of  another  company.  The  simple  act  of  binding  another 
company  for  the  same  amount  on  the  same  risk  does  not  of 
itself  relieve  the  first  company  of  its  liability;  the  insured 
must  ratify  the  transaction  before  it  becomes  effective. 

Nevertheless,  when  a  company  orders  its  policy  cancelled 
it  is  customary  for  the  agent  to  bind  its  line  in  another  com- 
pany, but  this  act  should  be  promptly  followed 
Notice  to  by  notification  to  the  insured  of  the  one  com- 

Insured  pany's  election  to  cancel  and  of  the  substitu- 

tion of  another's  binder  replacing  it;  if  the 
insured  accepts  the  substitution  that  act  operates  to  relieve 
the  first  company  of  its  liability:  Any  delay  in  notification 
is  dangerous,  for  if  fire  occurs  after  the  second  company  is 
binding  and  before  the  insured  has  accepted  substitution,  and 
before  the  five  days  following  notice  of  cancellation  have 
elapsed,  then  in  most  jurisdictions  he  may  elect  which  policy 
he  shall  hold  and  which  release,  but  he  must  do  one  or  the 
other — he  cannot  hold  both. 

Therefore,  when  the  liability  of  one  company  is  to  be  can- 
celled and  another  company  is  to  be  made  binding  by  the 
agent  in  its  place,  it  is  best  to  communicate  with  the  insured 
personally  and  secure  his  authorization  for  the  substitution, 
then  taking  up  the  first  company 's  policy  or  binder,  and  leav- 
ing in  its  place  the  policy  or  binder  of  the  second  company, 
thus  protecting  alike  the  company  cancelling  and  the  insured. 

If  loss  is  made  payable  to  a  mortgagee,  sub- 
Notice  to  stitution  or  replacement  even  though  effective 
Mortgagee        as  to  the  insui'ed  is  not  as  to  such  mortgagee 
unless  consented  to  by  him. 


140  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

Cancellation  of  Binders.  If  the  binder  contains  no  pro- 
vision as  to  the  number  of  days  notice  required  for  cancella- 
tion, it  is  probable  that  the  courts  would  hold  that  five  days' 
notice  is  necessary,  and  that  if  a  mortgagee  is  named  on  the 
binder,  ten  days'  notice  to  him  would  be  required.  Where 
a  binder  is  issued  for  the  renewal  of  a  policy  which  was  made 
payable  to  a  mortgagee,  but  for  any  reason  the  renewing 
policy  is  not  issued  until  after  date  of  inception,  notice  to 
mortgagee  of  cancellation  of  binder  would  probably  be  re- 
quired, even  though  such  binder  made  no  mention  of  the 
mortgagee. 

Oftentimes,  binders  are  issued  subject  to  cancellation  on 
one  day's  notice,  in  which  case  care  should  be  taken  not  to 
give  the  usual  five  days'  notice,  which  would  have  the  effect 
of  extending  the  binder  for  five  days  after  notice  is  received, 
instead  of  one  day. 

Insurance  companies  have  not  adopted  any  uniform  notice 
of  cancellation  and  each  usually  has  its  individual  forms 
which  it  prefers  to  have  its  agents  use.  The  following  are 
simple  forms  which  will  fulfil  legal  requirements  for  use 
as  indicated  thereon. 

Cancellation  Notice — where  premium  has  been  paid 

(Old  New  York  Standard  Policy) 
Dear  Sir: 

This  company  hereby  notifies  you  that  it  elects  to  cancel 

its  Policy  No in  accordance  with  the  terms  and 

conditions  therein  provided. 

Said    policy    was    issued    to    you    through    its    agency    at 

to  cover  on 

located    

Herewith  we  hand  you  $. . .  ^ being  an  amount  not  less 

than  the  pro  rata  unearned  premium  for  the  unexpired  term 
of  said  policy. 

In  accordance  with  the  conditions  referred  to  all  liability 
of  this  Company  under  this  policy  will  cease  and  determine 
at  the  expiration  of  five  days  from  the  receipt  by  you  hereof, 


CANCELLATION    AND    SUBSTITUTION                     141  \ 

i 

and  we  request  that  you  kindly  return  to  us  the  cancelled  i 

policy  for  our  files.  ' 

Yours  very  truly,  , 

Enc.  Insurance  Company. 

Agent.  ' 

Cancellation  Notice — where  premium  is  unpaid  j 

(Old  or  New  N.  Y.  Standard  Policy)  ] 

j 

For  use  where  it  is  not  desired  to  retain  the  line.  ] 

Dear  Sir:  j 

This  company  hereby  notifies  you  that  it  elects  to  cancel  ] 

its  Policy  No in  accordance  with  the  terms  and  ! 

conditions  therein  provided.  j 

Said   policy    was    issued    to    you    through    its    agency    at  : 

to  cover  on ! 

located    

In  accordance  with  the  conditions  referred  to  all  liability  i 

of  this  company  under  this  policy  will  cease  and  determine  j 

at  the  expiration  of  five  days  from  the  receipt  by  you  hereof,  i 

and  we  request  that  you  kindly  return  to  us  the  cancelled  ■ 
policy  for  our  files. 

AS  NO  PART  OF  THE  PREMIUM  ON  THE  POLICY  ! 

HAS'  BEEN  PAID,  we  request  that  you  pay  to  us  without  \ 

delay  $ ,  being  the  pro  rata  earned  premium  from  j 

the  beginning  of  the  policy  to  its  cancellation  by  virtue  of  ! 

this  notice.  I 

Yours  very  truly,  i 

Insurance  Company.  \ 

Agent.  . 

j 

Cancellation  Notice — where  premium  is  unpaid  \ 

(Old  or  New  N.  Y.  Standard  Policy)  j 

For  use  where  it  is  desired  to  retain  the  line.  .< 

Dear  Sir :  ' 

In  accordance  with  customary  rules,  the  EXAMPLE  IN-  ; 


143  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

SURANCE  COMPANY  requires  me  to  remit  the  premium  of 

$ on  policy  No issued  to  you  and  covering 

on situate ,  or  to  cancel  said  policy 

in  accordance  with  its  conditions. 

THE  PREMIUM  REMAINING  UNPAID,  I  am  reluctantly 
compelled  as  agent  of  the  EXAMPLE  INSURANCE  COM- 
PANY to  notify  you  of  its  election  to  cancel  the  policy  at  the 
expiration  of  five  days  from  receipt  by  you  hereof.  All  lia- 
bility thereunder  on  the  part  of  the  Company  will  cease  and 
determine   at   the   expiration   of   the   said   five   days,  unless 

during  such  period  the  full  premium  of  $ is  paid  at 

my  office  (give  address). 

Regretting  the  necessity  of  this  action  and  hoping  to  hear 
from  you,  I  remain, 

Yours  very  truly, 


Agent. 

Cancellation  Notice  to  Mortgagee 
(When  premium  has  been  paid) 
Dear  Sir: 

Please  take  notice  that  the Insurance  Company  elects 

to  cancel  the  mortgagee  clause  in  your  favor  attached  to  its 
policy  No issued  to  covering  on  prop- 
erty described  as  follows: 

This  notice  is  given  you  in  accordance  with  the  provisions 
contained  in  said  mortgagee  clause  relating  to  cancellation, 
and  liability  on  the  part  of  this  Company  under  said  mort- 
gagee clause  will  cease  and  determine  at  the  expiration  of 
ten  days  from  the  receipt  by  you  hereof. 
Yours  very  truly, 

Insurance  Company. 

\  Agent. 

Cancellation  Notice  to  Mortgagee 

(When  premium  is  unpaid) 
Dear  Sir: 

Please  take  notice  that  the Insurance  Company  elects 


CANCELLATION    AND    SUBSTITUTION  143 

to  cancel  the  mortgagee  clause  in  your  favor  attached  to  its 
policy  No issued  to covering  on  prop- 
erty described  as  follows: 

This  notice  is  given  you  in  accordance  with  the  provisions  j 

contained  in  said  mortgagee  clause  relating  to  cancellation,  ; 

and  liability  on  the  part  of  this  Company  under  said  mort-  i 

gagee  clause  will  cease  and  determine  at  the  expiration  of  j 

ten  days  from  the  receipt  by  you  hereof.  \ 

WE  HAVE  RECEIVED  NO  PART  OF  THE  PREMIUM  j 

ON  THIS  POLICY.  j 

Yours  very  truly,  j 

Insurance  Company.  I 

Agent. 

Cancellation  Notice — subject  to  loss  ) 

Memorandum :    For  use  in  cancellation  subject  to  loss  where  , 

the  Company  has  no  known  defense;  return  premium  to  '. 

be  figured  pro  rata  of  the  entire  premium  from  date  of  1 

notice.    If  it  has  a  known  defense — don't  cancel.  1 

Dear  Sir:  I 

This  company  hereby  notifies  you  that  it  elects  to  cancel  j 

its  Policy  No in  accordance  with  the  terms  and  j 

conditions  therein  provided.  \ 

Said   policy   was    issued   to    you    through    its    agency    at  \ 

to  cover  on ; 

located    i 

Herewith  we  hand  you  $ being  an  amount  in  ex- 
cess of  the  pro  rata  unearned  premium  on  said  policy,  subject 
to  correction  hereafter. 

In  giving   this   notice   this   Company   neither   admits  nor  ! 

denies  liability  for  any  claim  by  reason  of  fire  (date).  '  \ 

In  accordance  with  the  policy  conditions,  to  which  we  have  j 

referred,  all  liability  under  this  policy  on  the  part  of  this  | 


144                 THE  AGENTS   KEY   TO   FIRE   INSURANCE  \ 

Company  will  cease  and  determine  at  the  expiration  of  five  ; 

days  from  the  receipt  by  you  hereof.  ■> 

Yours  very  truly,  ; 

Enc.  Insurance  Company. 

Agent,  j 

Cancellation  Notice  to  Payee  | 

(To  be  sent  to  a  payee — not  a  mortgagee)  : 

Dear  Sir:  j 

Please  take  notice  that  the Insurance  Company  elects  i 

to  cancel  its  policy  No in  accordance  with  lines  | 

to inclusive  thereof.  j 

This  policy  was  issued  through  its  agency  at ,  j 

to ,    covering   on at    , 

and  loss,  if  any,  thereunder  was  made  payable  to  you.  ■ 

All  liability  to  you  on  the  part  of  this  Company  under  said  : 

policy  will  cease  and  determine  at  the  expiration  of  five  days  ^ 
from  the  receipt  by  you  hereof,  without  further  notice. 

Yours  very  truly,  ■ 

Insurance  Company,  i 

Agent,  i 

Note: — If  the  premium  has  not  been  paid  the  following  j 

may  be  added:     '*WE  HAVE  RECEIVED  NO  PART  OF  ! 

THE  PREMIUM  ON  THIS  POLICY."  j 

Notice  recalling  Void  Policy  j 

(For  use  where  it  is  not  desired  to  waive  the  ^ 

breach  of  condition)  i 

Dear  Sir:  j 

Information  has  reached  us  indicating  that  the  property  ; 

described  in  this  company's  policy  No located  j 

(is  encumbered  by  chattel  ; 

mortgage).  j 

If  this  is  true  the  policy  is  void,  and  there  will  be  due  you  * 

upon  its  return  the  unearned  premium  thereon.  ! 


CANCELLATION    AND    SUBSTITUTION  145 

If  our  information  is  incorrect  we  will  be  pleased  to  have 

you  advise  us. 

Yours  very  truly, 


Insurance  Company. 

Agent. 

Insert  after  location  the  nature  of  the  condition  which 
voids  the  policy ;  for  example : 

*'Is  encumbered  by  chattel  mortgage.'^ 

**Has  been  vacant  for  more  than  time  permitted  thereon." 

'* Contains  gasoline  in  excess  of  amount  permitted.'' 

**Has  been  sold." 

**Has  been  removed." 

Notice  recalling  Void  Policy 

(For  use  where,  if  satisfactorily  explained,  the  breach  of 
condition  may  be  waived  by  endorsement  on  the  policy.) 

Dear  Sir: 

Information  has  reached  us  indicating  that  the  property 

described  in  this  Company's  policy  No located 

(is  encumbered  by  chat- 
tel mortgage) . 

If  this  is  true  the  policy  is  void,  and  there  will  be  due  you 
upon  its  return  the  unearned  premium  thereon. 

If  you  will  let  us  have  a  statement  of  the  facts  regarding 
above,  we  will  be  pleased  to  see  whether  or  not  the  policy  may 
be  reinstated  by  proper  endorsement  thereon,  and  continue  in 
force. 

Awaiting  word  from  you,  we  remain. 

Yours  very  truly, 

Insurance  Company. 

Agent. 

Insert  after  location  the  nature  of  the  condition  which 
voids  the  policy;  for  examples  see  foregoing  notice. 


146  THE  AGENTS   KEY  TO  FIRE  INSURANCE  '. 

Note:    Under  the  terms  of  the  old  New  York  Standard  j 

policy  it  was  void  if  there  was  a  breach  of  certain  specified  j 

conditions,  but  under  the  new  New  York  Standard  policy  \ 
the   company  is   not   liable  WHILE   the   breach   continues. 

Technically  perhaps  the  policy  is  therefore  not  *'void"  but  > 

merely  suspended  during  such  time,  but  it  is  believed  the  j 

use   of  the  word  **void"   in   the   two   foregoing  notices  is  I 

quite  proper.  \ 


CHAPTER  XIII 

MORTGAGEE  AND   PAYEE   INTERESTS 

Mortgage  Clauses — Separate  Contract — Payment  of 
Loss — Multiple  Mortgages — Interest  Not  Invali- 
dated— Liability  for  Premium — Cancellation — 
Subrogation — A  Personal  Contract — Amount  of 
Loss — Chattel  Mortgage — Payee  Interest. 

Old  New  York  Standard  Policy.  The  only  reference 
therein  to  mortgagee  interests  is  as  foUows:  ''If,  with  the 
consent  of  this  company,  an  interest  under  this  policy  shall 
exist  in  favor  of  a  mortgagee  or  of  any  person  or  corporation 
having  an  interest  in  the  subject  of  insurance  other  than  the 
interest  of  the  insured  as  described  herein,  the  conditions 
heretofore  contained  shall  apply  in  the  manner  expressed 
in  such  provisions  and  conditions  of  insurance  relating  to 
such  interest  as  shall  be  written  upon,  attached,  or  appended 
hereto." 

It  will  be  noted  that  under  this  provision  the  conditions 
applicable  and  enforceable  as  regards  a  mortgagee  are  only 
those  preceding  line  56,  and  by  attachment  of  the  standard 
mortgagee  clause  many  of  these  are  waived.  Such  im- 
portant provisions  as  those  requiring  notice  of  loss,  rendering 
proofs,  right  of  appraisal,  limitation  of  time  for  beginning 
suit  and  others  were  omitted  from  the  contract  with  the 
mortgagee  since  they  are  not  mentioned  in  the  mortgagee 
clause. 

To  remedy  this  somewhat  anomalous  condition  without 
jeopardizing  mortgage  interests  the  following  conditions  were 
inserted  in  the 

New  New  York  Standard  Policy.  **If  loss  or  damage  is 
made  payable,  in  whole  or  in  part,  to  a  mortgagee  not 
named  herein  as  the  insured,  this  policy  may  be  cancelled 
as  to  such  interest  by  giving  to  such  mortgagee  a  ten  days' 
written  notice  of  cancellation.  Upon  failure  of  the  insured 
to  render  proof  of  loss  such  mortgagee  shall,  as  if  named 
as  insured  hereunder,  but  within  sixty  days  after  notice  of 

147 


148  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

such  failure,  render  proof  of  loss,  and  shall  be  subject  to 
the  provisions  hereof  as  to  appraisal  and  times  of  payment 
and  of  bringing  suit.  On  payment  to  such  mortgagee  of 
any  sum  for  loss  or  damage  hereunder,  if  this  Company 
shall  claim  that  as  to  the  mortgagor  or  owner,  no  liability 
existed,  it  shall,  to  the  extent  of  such  payment  be  subrogated 
to  the  mortgagee's  right  of  recovery  and  claim  upon  the 
collateral  to  the  mortgage  debt,  but  without  impairing  the 
mortgagee's  right  to  sue;  or  it  may  pay  the  mortgage  debt 
and  require  an  assignment  thereof  and  of  the  mortgage. 
Other  provisions  relating  to  the  interests  and  obligations 
of  such  mortgagee  may  be  added  hereto  by  agreement  in 
writing. ' ' 

Under  the  provision  the  policy  as  to  the  mortgagee  may 
be  cancelled  upon  ten  days'  written  notice;  the  mortgagee 
if  required  shall  render  proof  of  loss;  and  is  made  subject 
to  the  provisions  of  policy  relating  to  time  of  payment 
and  of  bringing  suit;  and  those  relating  to  appraisal  and 
subrogation. 

When  realty  is  encumbered  by  mortgage  the  mortgagee  has 
an  insurable  interest  therein,  and  may  insure  it  as  such,  but 
the  customary  method  is  to  issue  the  insurance 
Insurable         to  the  owner  or  mortgagor,  making  loss,  if  any, 
Interest  payable  to  the  mortgagee  and  attaching  a  mort- 

gagee clause.  If  the  policy  covers  both  real  and 
personal  property,  the  mortgagee  clause  should  be  made  to 
apply  to  the  realty  only.  A  mortgage  on  realty  does  not 
give  the  mortgagee  anj'^  ownership  interest  in  the  property, 
and  therefore  does  not  affect  the  **sole  and  unconditional 
ownership"  referred  to  in  the  policy. 

Unless  required  by  the  mortgagee  it  is  not  necessary  to 
make  any  mention  in  the  policy  of  a  mortgage  interest  in 
realty,  nor  to  make  loss,  if  any,  under  the  policy 
Mention  payable  to  the  mortgagee,  nor  to  attach  the 

Unnecessary  mortgagee  clause.  Sometimes  two  policies  are- 
taken  out  by  the  assured,  one  for  the  amount 
of  the  mortgage,  payable  to  the  mortgagee,  and  the  other  for 
the  remainder  of  value  of  building,  omitting  any  loss  payable 
clause ;  but  this  is  not  as  good  practice  as  to  make  all  policies 
payable  to  the  mortgagee,  as  his  mortgage  interest  may  ap- 
pear, thus  protecting  the  owner,  the  mortgagee  and  the  in- 
surance company. 


MORTGAGEE    AND    PAYEE    INTERESTS  149 

Mortgagee  Clauses.  In  New  York  State  there  are  two 
fonns  of  Standard  Mortgagee  Clauses,  one  called  the  Non- 
Contribution  Mortgagee  Clause,  and  the  other  the  Full  Con- 
tribution Mortgagee  Clause.  The  two  are  exactly  alike,  ex- 
cept for  a  condition  in  the  Full  Contribution  Mortgagee 
Clause  which  is  self-explanatory  and  reads  as  follows: — **In 
case  of  any  other  insurance  upon  the  within  described  prop- 
erty this  company  shall  not  be  liable  under  this  policy  for  a 
greater  proportion  of  any  loss  or  damage  sustained  than  the 
sum  hereby  insured  bears  to  the  whole  amount  of  insurance 
on  said  property,  issued  to  or  held  by  any  party  or  parties 
having  an  insurable  interest  therein,  whether  as  owner,  mort- 
gagee or  otherwise.^' 

Contribution.  Where  there  is  insurance  under  two  or  more 
policies  containing  the  mortgagee  clause  without  the  **full 
contribution"  feature,  the  mortgagee  may  demand  that  the 
full  amount  of  any  loss  ascertained  to  be  payable,  and  not 
in  excess  of  the  amount  of  such  insurance,  shall  be  payable 
to  him  (mortgagee),  even  though  the  insurance  so  payable 
constitutes  but  part  of  the  total  insurance,  the  balance  being 
payable  to  some  other  interest.  The  non-contribution  mort- 
gagee clause  may  therefore  be  a  greater  protection  to  the 
mortgagee  than  the  full  contribution  mortgagee  clause,  but 
if  all  the  insurance  is  payable  to  the  mortgagee  and  held  by 
him  it  does  not  matter  which  clause  is. used.  The  Company's 
interest  is  better  protected  by  the  full  contribution  clause. 

Separate  Contract.  The  mortgagee  clause  is  held  to  be  a 
contract  between  the  insurance  company  and  the  mortgagee, 
separate  and  distinct  from  the  policy  contract  between  the 
company  and  the  insured.  It  contains  several  provisions 
which  maj''  be  reviewed  as  follows : — 

(1)  LOSS  PAYABLE 

That  loss,  if  any,  under  the  policy  shall  be  payable  to  the 
mortgagee. 

Payment  of  Loss.  Most  companies  in  paying  a  loss  where 
a  mortgagee  clause  is  attached  to  the  policy  make  draft  pay- 
able both  to  the  mortgagee  and  the  insured,  thus  obtaining  a 
release  from  both.  If  the  company  were  to  pay  the  insured 
only  and  the  mortgagee  were  afterward  to  demand  payment, 
the  company  might  be  required  to  pay  him  even  though  it 
could  not  recover  the  money  paid  to  the  insured,  and  would 
then  be  in  the  position  of  paying  the  loss  twice. 

Multiple  Mortgages.  Where  there  is  more  than  one  mort- 
gage on  realty  and  each  mortgagee  has  separate  insurance  to 


150  THE  AGENTS   KEY  TO   FIRE  INSURANCE 

protect  his  interest,  the  non-contribution  clause  being  at- 
tached to  the  policies,  it  is  sometimes  thought  that  each  set  of 
insurance  must  pay  to  the  mortgagee  named  therein  the  full 
amount  of  any  loss  that  occurs  under  the  policy  (not  exceed- 
ing such  insurance),  even  though  the  amounts  so  paid  are 
double  the  amount  of  the  loss.  This  does  not  seem  equitable, 
and  it  is  doubtful  if  the  mortgagee  clause  would  always  be 
construed  so  favorably  to  both  mortgage  interests. 

Where  realty  is  encumbered  by  two  mortgages  there  are 
several  ways  in  which  the  rights  of  each  mortgagee  may  be 
protected  without  jeopardizing  the  rights  of  the  insurance 
company,  bearing  in  mind  that  any  insurance  money  paid  to 
a  mortgagee  reduces  his  mortgage  by  such  amount.  Either  of 
the  following  methods  will  protect  either  mortgagee,  pro- 
viding the  property  is  worth  the  amount  of  both  mortgages 
and  all  insurance  thereon  is  made  payable  to  one  or  to  the 
other,  or  to  both: 

First : — By  making  the  loss  payable  to  John  Doe,  first  mort- 
gagee, and  Richard  Roe,  second  mortgagee,  as  interest  may 
appear. 

Second : — By  making  loss  payable  to  John  Doe,  first  mort- 
gagee, as  interest  may  appear,  and  remainder,  if  any,  to 
Richard  Roe,  second  mortgagee. 

Sometimes  a  third  method  is  adopted,  viz.,  of  attaching  the 
full  contribution  mortgagee  clause  to  policies  which  are  issued 
separately,  in  favor  of  one  or  the  other  mortgagee  interest, 
or  in  any  case  attaching  it  to  the  policies  of  the  second 
mortgagee.    This  method  is  not  recommended. 

(2)  INTEREST  NOT  INVALIDATED 

That  the  insurance  as  to  the  interest  of  the  mortgagee 
therein  shall  not  be  invalidated  by  any  act  or  neglect  of  the 
insured,  or  of  any  tenant,  or  by  any  legal  proceedings,  or  by 
change  of  title  or  occupancy  or  increase  of  hazard,  provided, 
however,  that  the  mortgagee  shall  notify  the  insurance  com- 
pany of  any  change  of  title  or  occupancy  or  increase  of  haz- 
ard that  comes  to  his  knowledge,  and  shall  on  demand  pay  the 
premium  for  such  increased  hazard. 

If  the  mortgagee  at  the  inception  of  the  policy  knows  of 
conditions  which  render  it  void  as  to  the  insured,  it  is  prob- 
ably void  also  as  to  the  mortgagee,  but  knowl- 
Policy  Void  edge  acquired  by  the  mortgagee  after  the  in- 
ception of  the  policy,  except  as  to  change  of 
ownership  or  occupancy  or  increase  of  hazard,  does  not  affect 
his  rights. 


MORTGAGEE   AND    PAYEE    INTERESTS  151 

This  condition  shows  how  thoroughly  the  interest  of  the 
mortgagee  is  protected  against  any  act  of  the  owner  or  tenant 
that  does  not  come  to  his  knowledge.  On  this  point  an  emi- 
nent authority  says :  ' '  If  there  are  any  rights  or  advantages 
which  the  mortgagee  does  not  possess,  it  is  either  becau^  he 
has  not  yet  discovered  them  or  has  not  gone  after  them,  and 
more  remarkable  still  is  the  fact  that  for  all  this  the  mort- 
gagee pays  nothing  whatever.  He  gets  without  money  and 
without  price  a  contract  which  the  mortgagor  or  owner  of  the 
best  risk  in  the  land  cannot  buy  at  any  price. '  '* 

(3)  LIABILITY  FOR  PREMIUM 

That  if  the  owner  (insured)  neglects  to  pay  any  premium 
due  on  the  policy  the  mortgagee,  on  demand,  shall  pay  the 
premium. 

When  the  mortgagee  himself  orders  the  insurance  he  is 
expected  to  pay  the  premium  in  the  ordinary  course  of  busi- 
ness, but  if  the  insured  orders  the  insurance 
Payment  of      and  does  not  pay  the  premium,  then  on  demand 
Premium  the  mortgagee  must  pay  it  within  a  reasonable 

time,  or  forfeit  his  rights  under  the  con- 
tract. It  is  doubtful  if  the  mortgagee  can  be  held  except  for 
the  proportion  of  the  premium  from  the  date  of  demand  for 
premium  to  the  expiration  of  the  policy ;  or,  in  other  words,  it 
is  doubtful  whether  in  all  cases  he  can  be  made  to  pay  for  that 
portion  of  the  insurance  which  has  already  run  at  the  time 
of  demand  for  the  premium,  even  though  he  has  had  the  pro- 
tection of  the  insurance  during  such  time. 

(4)  CANCELLATION 

That  the  interest  of  the  mortgagee  may  be  terminated  (1) 
by  cancellation  of  the  policy,  or  (2)  by  cancellation  of  the 
mortgagee  clause,  but  in  either  case  the  mortgagee  must  be 
given  ten  days'  notice  and  his  interest  continues  for  ten 
days  after  notice  is  received.    (See  Cancellations.) 

(5)  SUBROGATION 

That  when  the  insurance  company  shall  pay  the  mortgagee 
for  a  loss  under  the  policy,  and  shall  claim  that  as  to  the 
owner  (insured)  no  liability  existed,  then  the  company  shall, 


Wm.  M.  Bament,  The  Mortgagee  Clause. 


152  THE  AGENTS   KEY   TO   FIRE  INSURANCE 

'i 

to  the  extent  of  such  payment,  be  subrogated  to  all  the  rights 
of  the  mortgagee. 

This  means  that  the  company  will  in  such  case  have  an 
interest  in  the  mortgage  to  the  extent  of  the  amount  of  loss 
paid  to  the  mortgagee.  When  subrogation  to  the  rights  of  the 
mortgagee  is  to  be  taken,  it  is  customary  for  the  insurance 
company  to  pay  the  entire  amount  of  the  mortgage,  which  is 
then  assigned  to  such  company. 

The  loss  payable  and  mortgagee  clauses  are  personal;  they 
protect  the  mortgagee  not  the  mortgage.    Hence,  if  the  mort- 
gage is  sold  or  transferred,  the  policy  should 
A  Personal      be  endorsed,  making  loss  payable  to  the  new 
Contract  mortgagee.    If  a  mortgage  is  paid  off  and  a  new 

mortgage  is  executed  to  the  same  party,  it  is 
held  to  be  a  change  of  mortgage  interest  and  to  require  en- 
dorsement on  the  policy.  If  the  policy  contains  no  pro- 
vision making  loss  payable  to  a  mortgagee  there  is  no  obli- 
gation on  the  company's  part  to  pay  such  loss  to  the  mort- 
gagee. The  mortgagee  in  such  case  has  only  such  rights  as 
are  given  him  by  the  terms  of  his  mortgage,  and  by  the  law, 
and  these  must  be  asserted  in  the  proper  manner  in  order  to 
be  effective. 

The  making  of  loss,  if  any,  payable  to  a  mortgagee,  with  or 
without  a  mortgagee  clause,  is  not  intended  to  waive  the  con- 
ditions of  the  policy  relating  to  the  amount  of 
Amount  loss  that  is  so  payable;  it  merely  stipulates,  in 

of  Loss  this  respect,  that  loss  in  such  amount  as  may 

be  duly  ascertained  to  have  been  sustained,  un- 
der the  terms  and  conditions  of  the  policy,  shall  be  payable  as 
provided. 

Therefore,  the  loss  payable,  or  the  mortgagee  clause,  is  not 
intended  to  waive  the  application  of  a  coinsurance  or  average 
clause,  or  any  other  clause  affecting  the  amount  payable,  or 
change  in  any  way  the  application  of  the  insurance. 

The  contention  sometimes  asserted  that  the  mortgagee 
clause  overrides  such  provisions  and  clauses  and  nullifies 
them  in  so  far  as  the  mortgagee  is  concerned  does  not  coincide 
with  the  general  understanding,  and  a  mortgagee  cannot 
safely  rely  on  such  an  extreme  construction  of  the  rights 
given  to  him  under  the  mortgagee  clause. 


MORTGAGEE   AND    PAYEE    INTERESTS  153 

The  following  clause  is  sometimes  used  on  a  policy  of  in- 
surance which  is  ordered  and  paid  for  by  the  mortgagee : 

**Loss,  if  any,  to  be  adjusted  with,  payable  to  and  recover- 
able by, Mortgagee.    It  is  understood  and  agreed 

that  if  in  the  event  of  fire  there  is  found  to  be  in  force  any 
other  insurance  in  this  or  any  other  Company,  said  other  in- 
surance shall  not  be  considered  as  contributing  insurance  nor 
shall  said  other  insurance  pro  rate  with  this  Company  as  far 

as  the  interest  of in  said  loss  is  concerned,  unless 

said  other  insurance  is  also  payable  to as 

Mortgagee.  It  is  further  understood  and  agreed  that  it  is 
the  intent  of  this  Company  to  reimburse as  mort- 
gagee for  the  full  amount  of  his  loss  up  to  the  amount  of 
this  policy,  regardless  of  any  other  insurance  (except  such 
as  may  also  be  payable  to  him)  which  may  have  been  effected 
on  said  property. '* 

The  best  method  of  protecting  all  mortgagee  interests, 
when  there  are  two  or  more  mortgages  on  the  same  property, 
is  one  of  the  questions  that  frequently  arises,  particularly 
with  reference  to  the  interest  of  the  second  and  subsequent 
mortgages. 

The  method  recommended  by  most  authorities  is  to  issue 
all  insurance  to  the  owner,  with  loss  if  any  payable  under 

a  mortgagee  clause  to  the  first  mortgagee,  as 
First  and  interest  may  appear,  remainder  if  any  to  sec- 

Subsequent  ond  mortgagee,  and  so  on.  Unless  complicated 
Mortgagees      by   some   other   question   there   should   be   no 

impairment  of  the  security  of  any  mortgagee 
interest  if  the  full  amount  of  the  loss  is  paid  to  the  first 
mortgagee,  thereby  reducing  his  mortgage  interest  by  such 
sum,  therefore,  this  method  is  equitable  and  in  line  with  the 
principle  of  indemnity. 

It  has  been  claimed  by  some  authorities  that  if  property 
is  encumbered  by  four  mortgages  and  each  mortgagee  holds 
insurance  for  the  full  value  of  the  property,  payable  to  him 
alone  under  a  mortgagee  clause,  that  each  set  of  insurance 
might  be  required  to  pay  the  full  amount  of  any  loss  that 
was  less  than  the  mortgage  interest  covered  thereby,  which 
would  therefore  amount  to  paying  four  times  the  actual 
property  loss.  This  is  neither  sensible  nor  equitable  and 
it  is  at  least  doubtful  whether  any  court  would  sustain 
such  an  uneconomical  procedure.     In  fact  there  have  been 


154  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

SO  many  conflicting  decisions  and  opinions  arising  where 
mortgagees  had  separate  insurance  to  protect  their  interests 
as  to  warrant  the  statement  that  no  well  settled  principle 
has  been  laid  down. 

Certain  it  is  that  where  each  of  two  or  more  mortgagees 
obtains  insurance,  payable  separately  to  him  alone,  all  mort- 
gagee interests  are  likely  to  be  involved  in  questions  of  coin- 
surance, contribution,  apportionment  and  subrogation  which 
would  be  avoided  if  all  insurance  were  made  payable  to 
all  mortgagees  in  the  customary  manner. 

CHATTEL  MORTQAaE 

Where  a  policy  on  personal  property  is  made  payable  to  a 
chattel  mortgagee  many  companies  will  not  permit  the  at- 
tachment of  a  mortgagee  clause,  being  unwill- 
Notice  ing  to  give  to  the  chattel  mortgagee  the  benefit 

in  Policy  of  that  separate  and  broad  contract.    In  such 

cases  the  payee  clause  is  made  to  read,  **Loss, 
if  any,  payable  to  John  Doe  as  interest  may  appear,  (or  as 
mortgage  interest  may  appear),  subject,  nevertheless,  to  all 
the  conditions  of  this  policy. '^  The  exception  to  this  rule 
is  where  a  large  enterprise,  such  as  a  Railroad,  has  executed 
a  mortgage,  covering  both  real  and  personal  property,  to  pro- 
tect an  issue  of  bonds,  in  which  case  there  is  usually  no 
objection  to  making  loss  payable  to  the  trustee  for  the  bond- 
holders, and  attaching  the  mortgagee  clause. 

While  insurance  companies  do  not  as  a  rule  regard  chattel 
mortgaged  property  as  a  good  insurance  risk,  there  are  cir- 
cumstances under  which  they  will  accept  lines 
Where  with  more  or  less  freedom  on  the  recommenda- 

Permitted        tion  of  the  agent.    The  following  will  serve  as 
illustrations  of  such  cases: 

The  stock  of  an  old  established  drug,  grocery  or  jewelry 
concern  that  has  been  purchased  by  one  familiar  with  the 
business,  giving  in  payment  part  cash  and  protecting  the 
balance  by  a  purchase  money  mortgage,  which  is  to  be  re- 
duced in  regular  installments; 

Stocks  in  warehouses  mortgaged  to  a  bank  to  protect  a 
loan. 


MORTGAGEE   AND    PAYEE    INTERESTS  165 

STOCKS  IN  WAREHOUSE  MORTaAGED  OR  PLEDaED 
TO  A  BANK  TO  PROTECT  THE  LOAN 

In  a  case  of  this  kind  it  has  been  the  custom  to  attach 
the  simple  loss  payable  clause,  but  this  is  not  always  satis- 
factory to  the  bank.  The  best  method  of  protecting  the 
bank's  interest  in  goods  pledged  as  collateral  for  loan  is 
to  issue  the  insurance  to  the  owner  of  the  goods,  attaching 
a  standard  mortgagee  clause  making  loss  payable  to  the 
bank.  Some  companies  might  object  to  this  course  since  it 
is  against  established  practice  to  attach  a  mortgagee  clause 
to  policies  covering  personal  property. 

Another  suggested  method  is  to  issue  the  policy  to  the 
bank  **For  Account  of  Whom  It  May  Concern."  This  has 
the  objection  that  it  gives  any  one  having  an  interest  in 
the  goods  the  right  to  make  claim  for  a  share  of  the  insur- 
ance in  case  of  loss.  The  filing  of  such  a  claim  upon  the 
bank  or  the  insurance  company  would  require  recognition 
if  the  interest  were  valid.  If  no  other  interest  made  claim 
under  the  insurance  the  insurance  company  ordinarily  would 
pay  the  amount  of  claim  to  the  bank  and  take  its  receipt, 
but  this  might  not  secure  for  the  bank  the  exclusive  pro- 
tection desired.  Perhaps  the  most  important  objection  to 
this  method  is  a  possible  complication  regarding  contribution. 
Unless  goods  are  described  in  the  policy  by  marks  or  num- 
bers or  otherwise  specifically  identified  insurance  might  and 
probably  would  apply  to  any  property  of  the  same  kind  in 
the  same  location  insured  in  a  similar  manner.  To  illustrate : 
Smith  borrows  from  the  bank  on  collateral  of  sugar  in 
warehouse.  Jones  borrows  from  the  same  bank  on  the  same 
kind  of  collateral  in  same  warehouse.  The  bank  takes  out 
separate  insurance  on  each  lot  of  sugar  under  the  title 
^'For  Account  of  Whom  It  May  Concern. '^  There  is  little 
doubt  that  all  such  policies  covering  sugar  in  warehouse 
would  contribute  with  each  other.  Hence  under-insurance 
in  the  aggregate,  or  insolvency  of  some  one  company,  or 
other  cause,  might  seriously  complicate  a  situation  so  created. 

Another  suggested  method  is  to  issue  policies  to  owner 
and/or  bank  as  interest  may  appear  with  loss  payable  to 
the  bank.  Such  a  policy  covers  two  separate  and  distinct 
interests — namely,  ownership  interest  and  lienor's  interest — 
and  has  the  advantage  that  in  ordinary  practice  the  bank 
may  join  in  the  adjustment  of  lo^s  and  would  join  in 
executing  proofs,  so  that  it  would  always  be  in  touch  with 


156  THE  AGENTS   KEY   TO  FIRE  INSURANCE 


the  cdiiiu).  In  the  extreme  case  a  bank  would  have  the  right 
to  render  independent  proofs,  making  claim  for  loss  to  its 
interest  as  lienor.  Such  a  policy  probably  would  not  be 
avoided  by  an  act  of  the  owner  atlfeeting  the  owner's  in- 
terest, because  the  bank's  interest  is  a  separate  and  different 
subject  of  insurance  even  though  joined  in  one  policy  con- 
tract with  the  ownership  interest. 

PAYEE  INTERESTS 

Where  a  policy  contains  the  provision,  "Loss,  if  any,  pay- 
able to  John  Doe,  as  interest  may  appear,"  it  has  been  un- 
derstood that  such  a  clause  did  not  cause  the  insurance  com- 
pany to  assume  any  obligation,  nor  the  payee  to  receive  any 
rights,  beyond  requiring  that  any  money  becoming  due  and 
payable  by  reason  of  loss  under  the  policy  shall  be  paid  to 
said  payee  and  that  payee  shall  be  notified  in  case  the  insur- 
ance company  elects  to  cancel  the  policy.  There  is  no  dis- 
puting this  view  in  so  far  as  any  payee  interests  are  con- 
cerned except  a  mortgage  interest,  but  the  courts  in  some 
cases  now  seem  to  be  leaning  toward  the  view  that  the  intent 
of  such  clause  is  to  give  the  mortgagee  an  interest  in  the 
insurance  that  is  superior  to  the  owner 's  interest.  No  opinion 
is  ventured  on  this  point,  and  it  is  mentioned  only  to  show 
the  care  that  needs  to  be  exercised  in  putting  loss  payable 
clauses  on  policies  covering  personal  property. 


CHAPTER  XIV 

IMPORTANT  CLAUSES 
Affecting  Amount  or  Distribution  of  Liability 

Coinsurance  Clauses — Theory  of  Coinsurance — 6% 
Waiver  Clause — Coinsurance  (Floating) — Coin- 
surance and  Limitation  Clause — Distribution 
Clauses  —  Pro  Rata  Clauses  —  Three-fourths 
Value  Clause — Three-fourths  Loss  Clause — Two- 
thirds  Vacancy  Clause. 

The  use  of  coinsurance  on  fire  insurance  contracts  is  an 
adaptation  of  the  average  clause  used  in  all  marine  insurance 

contracts  and  a  principle  that  dates  back  to 
Other  the  earliest  beginnings  of  maritime  ventures. 

Names  Such  clauses   in  fire  insurance  contracts   are 

also  referred  to  as  average  clauses,  contribu- 
tion clauses,  percentage  coinsurance  clauses,  reduced  rate 
average  clauses,  reduced  rate  coinsurance  clauses  and  re- 
duced rate  contribution  clauses,  all  having  the  same  general 
meaning  and  effect,  however  worded,  except  possibly  in  cases 
of  non-concurrency. 

The  following  clauses  will  illustrate  those  in  common  use, 
though  there  are  others  with  somewhat  different  wordings: 

COINSURANCE  CLAUSE 

*'It  is  hereby  agreed  that  the  assured  shall  maintain  in- 
surance  during  the  life  of   this  policy  upon  the  property 

hereby  insured  to  the  extent  of  at  least  per  cent. 

of  the  actual  cash  value  at  the  time  of  the  fire;  and  that 
failing  so  to  do,  the  assured  shall  to  the  extent  of  such 
deficit  bear  his  proportion  of  any  loss." 

157 


158                 THE  AGENTS   KEY  TO   FIRE  INSURANCE  i 

AVERAGE  CLAUSE  ' 

''This  Company  shall  not  be  liable  for  a  greater  propor-  ! 

tion  of  any  loss  or  damage  to  the  property  described  herein  ■ 

than  the  sum  hereby  insured  bears  to    per  cent,  i 

( % )   of  the  actual  cash  value  of  said  property  at  the  j 

time-  such  loss  shall  happen,  nor  for  more  than  the  propor-  j 

tion  which  this  policy  bears  to  the  total  insurance  thereon."  i 

REDUCED  RATE  AVERAGE  CLAUSE 

''In  consideration  of  the  rate  at  and/or  form  under  which  ; 

this  policy  is  written,  it  is  expressly  stipulated  and  made  a  j 

condition  of  this  contract,  that  this  Company  shall  be  held  ; 

liable  for  no  greater  proportion  of  any  loss  than  the  amount  i 

hereby  insured  bears   to    per  cent,   of  the  actual  ] 

cash  value  of  the  property  described  herein  at  the  time  when  j 
such  loss  shall  happen;  but  if  the  total  insurance  upon  such 

property  exceeds per  cent,  at  the  time  of  such  loss,  j 

then  this  company  shall  only  be  liable  for  the  proportion  j 

which  the  sum  hereby  insured  bears  to  such  total  insurance,  ] 

not   exceeding   the   actual   amount   of  loss  to  the  property  ! 
insured.  ^ ' 

PERCENTAGE  VALUE  CLAUSE  i 

"If  at  the  time  of  fire  the  whole  amount  of  insurance  * 

on  the  property  covered  by  this  policy  shall  be  less  than  ' 

per  cent,  of  the  actual  cash  value   thereof,  this  ! 

company  shall  in  case  of  loss  or  damage  be  liable  for  only  | 

such  portion  of  such  loss  or  damage  as  the  amount  insured  : 

by  this  policy  shall  bear  to  the  said  per  cent,  of  1 

the  actual  cash  value  of  such  property."  \ 

Whenever   clauses   of   this  kind   are   attached   to   policy,  : 

it  is  the  custom  to  include  therewith  the  following  condition :  ; 

"If  the  insurance  under  this  policy  be  divided  into  , 

two  or  more  items  the  foregoing  conditions  shall  apply  j 

to  each  item  separately."  i 

The  purpose  of  this  clause  is  to  avoid  the  possibility  of  I 

there  being  sufficient  insurance  over  the  whole  amount  of  > 

property  to  comply  with  the  80%  clause,  yet  with  some  item  : 


IMPORTANT  CLAUSES   (COINSURANCE  AND  OTHERS)     159 

covered  by  a  specific  amount  of  insurance  very  much  less 
than  the  required  80%,  thus  defecting  the  purpose  of  the 
80%  clause. 

In    effect   the   coinsurance   or   average   clause   constitutes 
an  agreement  between  the  insured  and  the  company  deter- 
mining the  proportion  of  any  loss  for  which 
Its  Meaning     the   latter    shall    be    liable,    same    being    con- 
tingent upon  the  amount  of  insurance  main- 
tained in  proportion  to  the  value  of  property  covered. 

If  the  100  per  cent,  (or  full)  coinsurance  clause  is  used 
then  the  insured  is  entitled  to  recover  such  proportion  of  any 
loss  as  the  total  insurance  bears  to  the  total  value  of  prop- 
erty covered. 

Practically,  if  the  insured  maintains  concurrent  insurance 
equal  to  the  value  of  property  covered,  the  insurance  pays 
all  of  any  loss;  if  the  insurance  maintained  is  less  than  the 
value  then  it  pays  proportionately  less  of  the  loss.  This  is 
merely  an  example  of  the  familiar  *' ratio  and  proportion'' 
found  in  every  arithmetic,  and  is  usually  clear  to  all. 

Where  many  experience  difficulty  is  in  explaining  the  80% 
coinsurance  clause,  yet  its  application  is  identical  with  the 

foregoing,  being  merely  a  requirement  of  80% 
80%  Clause      insurance  to  value  instead  of  100%.    Hence,  if 

the  insured  maintains  concurrent  insurance 
equal  to  80%  (or  more)  of  the  value  of  property  covered,  the 
insurance  pays  all  of  any  loss  (not  exceeding,  of  course,  the 
amount  of  the  insurance) ;  if  less  than  80%  insurance  is 
maintained,  then  same  pays  proportionately  less  of  the  loss. 


160 


THE  AGENTS   KEY  TO  FIRE  INSURANCE 


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IMPORTANT  CLAUSES    ( COINSURANCE  AND  OTHERS)     161 

There  is  nothing  in  the  clause  to  prohibit  more  than  80% 
insurance  to  value;   thus  if  with  a  value  of 

Insurance         $7,500  there  is  $7,000  or  $7,500  insurance  it 

May  must  pay  all  of  any  loss  up  to  those  amounts. 

Exceed  80%  Many  think  that  the  80%  clause  means  that  the 
insured  is  only  entitled  to  collect  80%  of  any 

loss  that  occurs,  but  that  is  untrue  as  the  above  clearly  shows. 

The  four  things  to  remember  when  using  the  80%  clause 
are  these: 

1.  That  the  80%  clause  does  not  mean  that  the  insurance 
will  pay  only  80%  of  any  loss. 

2.  That  if  the  insured  fails  to  carry  at  least  80%  insur- 
ance to  value,  then,  in  effect,  he  insures  himself  for  the 
amount  lacking,  and  this  self  insurance  must  pay  its  propor- 
tion of  any  loss. 

3.  That  if  a  loss  equals  or  exceeds  the  percentage  of  value 
stipulated  in  the  coinsurance  clause  the  latter  is  inopera- 
tive. 

4.  To  ascertain  the  value  of  property  and  then  be  careful 
to  have  concurrent  insurance  amounting  to  80%  or  more  of 
such  value,  in  which  case  the  insured  will  be  entitled  to  collect 
the  loss  just  as  if  the  clause  was  not  attached  to  the  policy. 

100%  (or  full)  and  90%  coinsurance  clauses  follow  the 
same  principle,  merely  substituting  the  percentage  of  insur- 
ance to  be  carried. 


The  Theory  of  Coinsurance.  Fire  insurance  is  a  system 
of  averages  in  the  sense  that  premiums  collected  from  the 

many  who  insure  must  pay  the  losses  of  the 
Average  few  whose  property  is  destroyed  by  fire.    The 

cost  of  insurance,  i.  e.,  the  rate  of  premium, 
varies  in  accordance  with  construction,  hazard  and  means 
of  extinguishing  fire,  and  is  reduced  proportionately  with 
the  likelihood  that  fire  occurring  will  only  partially  destroy 
the  property  involved.     Manifestly  rates  can  be  so  reduced 


162  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

only  when  a  partial  loss  to  property  will  result  in  a  pro- 
portionately  partial   loss   to   insurance   thereon.     Governed 

by  the  laws  of  average  these  rates  cannot  be 
To  Preserve  fixed  to  justly  and  equitably  distribute  the 
Equity  burden  of  this  fire  cost  unless  the  percentage  of 

insurance  carried  to  the  value  of  property  cov- 
ered is  about  the  same  in  each  case,  or  else  some  limitation 
of  liability  for  loss  in  the  proportion  that  insurance  bears  to 
value,  precisely  as  it  is  impossible  to  justly  and  equitably  fix 
an  average  rate  of  city  taxation  unless  the  assessed  valuation 
of  all  buildings  is  fixed  at  the  same  percentage  of  their  full 
or  market  value.    It  is  therefore  inequitable  that  one  should 

insure, for  50%  of  value,  another  for  30%, 
Like  a  another  for  80%  and  andther  for  100%,  unless 

Tax  Rate  the  insurance  pays  in  like  proportion  on  any 

loss  that  occurs,  for  otherwise  some  would 
pay  less  than  their  share  of  the  average  premiums  while  re- 
ceiving full  indemnity  up  to  the  amount  of  insurance  carried. 
Every  man  expects  to  recover  his  loss  in  full,  therefore  he 
should  pay  his  share  of  the  average  premium  in  full,  or 
suffer  the  consequence  of  his  neglect  to  bear  his  part  of  the 
burden. 

These  are  the  principles  upon  which  the  use  of  coinsurance 
is  based,  and  its  universal  application  to  contracts  of  insur- 
ance will  result  in  a  more  equitable  distribution 
Principles        of  the  fire  cost,  and  lower  average  rates  of 
premium,  than  could  possibly  obtain  without 
its  adoption. 

*Five  Per  Cent.  Waiver  Clause.  It  is  recognized  that  if 
large  values  are  covered  under  an  insurance  policy  it  would 

work  a  hardship  on  the  insured  to  require  an 
Waiver  of  inventory  of  the  undamaged  as  well  as  the 
Inventory         damaged  property,  hence  there  has  arisen  the 

use,  in  connection  with  the  coinsurance  clause, 
of  the  5%  waiver  clause,  reading  as  follows,  or  in  words  of 
similar  meaning: 

**In  the  event  that  the  aggregate  claim  for  any  loss 
is  both  less  than  ten  thousand  dollars  ($10,000)  and  less 


♦Sometimes  "Two"  instead  of  "Five. 


IMPORTANT  CLAUSES   ( COINSURANCE  AND  OTHERS)     163 

than  five  per  cent.  (5%)  of  the  total  amount  of  insurance 
upon  the  property  described  herein  at  the  time  such 
loss  occurs,  no  special  inventory  or  appraisement  of 
the  undamaged  property  shall  be  required. '* 

''If  the  insurance  under  this  policy  be  divided  into  two 
or  more  items,  the  foregoing  conditions  shall  apply  to 
each  item  separately." 

It  will  be  observed  that  this  does  not  waive  the  applica- 
tion  of  coinsurance  clause;  it  merely  waives  the  special  in- 
ventory of  undamaged  property  in  cases  where  the  loss  has 
been  agreed  upon. 

Floating  Coinsurance  Clause.  A  special  coinsurance  clause 
for  use  in  writing  floating  policies  in  New  York  State  reads 
as  follows: 

''If  any  property  included  in  the  terms  of  this  policy 
shall  at  the  time  of  any  loss  be  more  specifically  insured 
by  this  company  or  any  other  insurer,  this  policy  shall 
extend  to  cover  such  property  only  so  far  as  relates 
to  any  excess  of  value  not  covered  by  such  other  in- 
surance, whether  valid  or  not,  and  this  policy  shall  be 
liable  on  such  more  specifically  insured  property  only 
for  such  loss  as  shall  be  in  excess  of  the  amount  payable 
by  or  recoverable  from  such  more  specific  insurers, 
whether  solvent  or  otherwise,  but  in  no  event  shall 
this  Company  under  this  policy  be  liable  for  a  greater 
proportion  of  any  loss  than  the  amount  of  this  policy 

shall  bear  to   per  cent.   ( % )   of  the  total 

cash  value  of  the  property  covered  by  this  policy  (in- 
cluding such  excess  value)  at  the  time  of  any  loss." 

Coinsurance  and  Limitation  Clause.  This  is  another  special 
clause  sometimes  used  in  writing  certain  classes  of  property. 
Its  MSB  arose  through  the  attempt  to  eliminate  moral  hazard 
by  requiring  that  an  insured  must  carry  a  certain  fixed 
amount  of  insurance,  yet  must  himself  bear  a  certain  amount 
of  any  loss  sustained.  The  clause  reads  in  various  ways,  of 
which  the  following  is  one  form : 

If  at  the  time  of  fire  the  whole  amount  of  insurance  on 
the  property'-  covered  by  this  policy  shall  be  less  than 
(75)  per  cent,  of  the  actual  cash  value  thereof,  this  Com- 
pany shall,  in  case  of  loss  or  damage,  be  liable  for  such 


164  THE  AGENTS   KEY  TO   FIRE  INSURANCE 

portion  only  of  the  loss  or  damage  as  the  amount  insured 
by  this  policy  shall  bear  to  the  said  (75)  per  cent,  of  the 
actual  cash  value  of  such  property;  provided,  that  in 
case  the  whole  insurance  shall  exceed  (75)  per  cent,  of 
the  actual  cash  value  of  the  property  covered  by  this 
policy,  this  Company  shall  not  be  liable  to  pay  more 
than  its  pro  rata  share  of  said  (75)  per  cent,  of  the 
actual  cash  value  of  such  property;  and  should  the  whole 
insurance  at  the  time  of  fire  exceed  the  said  per  cent. 
a  pro  rata  return  of  premium  on  such  excess  of  insurance 
from  the  time  of  the  fire  to  the  expiration  of  this  policy 
shall  be  made  on  surrender  of  the  policy. 

Effects  Permission  for  Other  Insurance.  It  should  not  be 
overlooked  that  the  attachment  of  a  coinsurance  clause  consti- 
tutes permission  for  insurance  in  amount  equal  to  the  per- 
centage of  value  stipulated  by  such  clause. 


DISTRIBUTION  CLAUSE 

Sometimes  called  the  AVERAGE  CLAUSE,  the  AVERAGE 
DISTRIBUTION  CLAUSE  and  the  PRO  RATA  DISTRIBU- 
TION  CLAUSE.  This  clause  reads  in  various  ways,  the 
following  forms  being  in  most  common  use: 

'*This  policy  shall  attach  in  each  building  or  location 
in  the  proportion  that  the  value  in  each  bears  to  the  value 
in  all.'' 

'*The  amount  of  this  policy  shall  attach  pro  rata  with 
the  value  of  property  covered  hereunder  in  each  separate 
building  or  location.'' 

**This  insurance  shall  apply  in  both  locations  pro  rata 
according  to  the  value  of  the  property  covered." 

"It  is  understood  and  agreed  that  the  amount  insured 
by  this  policy  shall  attach  in  each  of  the  above  named 
premises  in  that  proportion  of  the  amount  hereby  insured 
that  the  value  of  the  property  covered  by  this  policy, 
contained  in  each  of  the  said  places,  shall  bear  to  the 
value  of  such  property  contained  in  all  of  the  above 
named  premises." 


IMPORTANT  CLAUSES   ( COINSURANCE  AND  OTHERS)     165  j 

The  foregoing  clause  is  also  used  with  the  word  ''build-  ; 

ings"  in  place  of  the  words  ''premises"  or  "places."  ^ 

"It  is  understood  and  agreed  that  the  amount  insured  ^ 

by  this  policy  shall  attach  in  or  on  each  building,  shed  '■ 

and  other  structure  and/or  place  in  that  proportion  of  the  j 

amount  hereby  insured  that  the  value  of  the  property  I 
covered  by  this  policy  in  or  on  each  said  building,  shed 

and  other  structure  and/or  place  shall  bear  to  the  value  1 

of  all  the  property  described  herein."  1 

Western  Union  Distribution  Clause   (West)  j, 

"It  is  a  condition  of  this  policy  that  the  amount  in-  | 

sured  hereunder  shall  attach  in  or  on  each  building,  shed  ; 

and  other  structure  and  (or)  place,  in  that  proportion     .  \ 

of  the   amount  hereby  insured   that   the   value   of  the  I 

property  covered  by  this  policy  in  or  on  each  said  build-  : 
ing,  shed  and  other  structure  and   (or)  place,  bears  to 
the  value  of  all  property  described  herein." 

Uniform  Pro  Rata  Distribution  Clause  (East)  ■ 

"It  is  a  condition  of  this  contract  that  the  amount  ! 

insured  hereunder  shall  attach  in  or  on  each  building,  | 
shed  and  other  structure  and/or  place  in  that  proportion 

of  the  amount  hereby  insured  that  the  value  of  the  prop-  i 

erty  covered  by  this  policy  in  or  on  each  said  building^  i 

shed  and  other  structure  and/or  place  shall  bear  to  the  \ 

value  of  all  the  property  described  herein. "      '  1 

The  clause  used   in   writing  lumber  in  New  York   State  ; 

reads  as  follows:  j 

"It  is  a  condition  of  this  contract  that  the  amount 

insured  under  this  policy  shall  attach  at  the  time  of  j 

any  loss  in  each  building  and/or  shed  and  in  each  section  ' 

of  "yard  or  piling  ground  as  shall  be  separated  by | 

feet  or  more  of  CLEAR  SPACE   (platforms  and  tram-  i 

ways  without  lumber  piled  thereon  not  included)   from  1 

any  other  building  or  section,  in  that  proportion  of  the  j 

amount  hereby  insured  that  the  value  of  the  property  { 
covered  by  this  policy  in  each  such  location  shall  bear 
to  the  value  of  such  property  in  all  such  locations." 

Where  policy  is  written  blanket  on  building  and  contents,  • 

and  the  rule  requires  a  specific  amount  on  building,  on  ma-  \ 


166  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

chinery  and  on  stock,  the  following  distribution  clause  will 
serve  the  purpose  if  there  is  no  prescribed  form : 

**This  policy  shall  attach  separately  on  building,  on 
machinery  and  on  stock  therein,  in  the  proportion  that 
the  value  of  each  bears  to  the  value  of  all." 

Where  there  is  more  than  one  building,  and  it  is  desired  to 
write  buildings,  machinery  and  stock  blanket,  with  distribu- 
tion clause  applying  separately  to  each  building,  to  the  ma- 
chinery in  each  and  to  the  stock  in  each,  the  following  form 
of  clause  will  serve  if  there  is  no  prescribed  form : 

**This  policy  shall  attach  separately  on  each  building, 
on  the  machinery  in  each  building  and  on  the  stock  in 
each  building,  in  the  proportion  that  the  value  of  each 
such  subject  bears  to  the  value  of  all." 

The  meaning  and  application  of  all  such  clauses  follow  the 
same  principle,  and  can  hardly  be  explained  any  more  simply 

and  clearly  than  by  the  clauses  themselves. 
Meaning  The  distribution  clause  automatically  makes  a 

policy  specific,  for  under  its  operation  the  in- 
surance follows  the  value  of  property  proportionately  in  the 
various  buildings  or  locations,  or,  expressed  another  way,  the 
insurance  attaches  specifically  in  the  various  buildings  or 
locations  proportionately  with  the  value  of  property  covered. 
This  may  be  illustrated  as  follows: 

If  a  $20,000  policy  is  distributed  over  five  items  aggregat- 
ing $30,000  in  value  as  shown  below,  then  *^This  insurance 
($20,000)  shall  cover  in  each  building  (or  location)  in  the 
proportion  that  the  value  in  each  bears  to  the  value  in  all," 
with  the  following  result: 

Value  Proportion  Insurance 

Building  1 $4,000  4/30ths  $2,666.67 

Building  2   6,000  6/30ths  4,000.00 

Building  3   .12,000  12/30ths  8,000.00 

Building  4 5,000  5/30ths  3,333.33 

Building  5   3,000  3/30ths  2,000.00 

Totals   30,000  30/30ths  20,000.00 

The  distribution  clause  is  designed  for  use  when  property 


IMPORTANT  CLAUSES   (COINSURANCE  AND  OTHERS)      167 

constituting  two  or  more  separate  risks,  not  likely  to  be  in- 
volved  in   anj'^   one   fire,   is   written   under   a 
When  blanket  form,  for  without  its  use  the  insurance 

Used  would  have  to  be  made  to  cover  for  specific 

amounts  at  each  location,  otherwise  the  90% 
or  100%  coinsurance  clause  made  a  part  of  the  contract.  (See 
Blanket  Forms.)  There  is  usually  no  reason  for  its  use  when 
insuring  buildings,  for  their  values  are  not  subject  to  much 
fluctuation;  its  advantage  lies  in  covering  contents  (either 
machinery  or  stock)  under  a  blanket  form  where  the  values 
are  shifting  from  building  to  building,  or  location  to  location, 
yet  are  fairly  stable  in  the  aggregate,  for  it  is  not  always 
feasible  with  such  shifting  values  to  carry  specific  amounts 
in  each  building  or  location. 

The  blanket  form  is  often  used  with  the  distribution  clause 
and  the  80%  coinsurance  clause  and  the  advantage  here  lies 
in  securing  the  benefit  of  the  lower  rates  offered 
Blanket  for  the  use  of  coinsurance  without  having  to 

Forms  carry  specific  amounts  in  each  building  or  lo- 

cation as  is  otherwise  required  when  the  80% 
clause  alone  is  used.  As  has  been  stated,  it  is  not  always 
feasible  to  maintain  just  the  right  amount  of  insurance  in 
each  place  separately,  whereas  it  is  usually  easy  to  keep  track 
of  the  values  as  a  whole,  and  thus  to  comply  with  the  con- 
ditions of  the  coinsurance  clause.  It  also  gives  a  wider 
margin  for  fluctuations  of  values,  so  that  there  is  less  likeli- 
hood of  having  insufficient  insurance,  and  thus  having  to  bear 
a  part  of  the  loss;  besides  there  is  the  saving  in  the  expense 
of  the  extra  10%  or  20%  insurance  that  would  be  needed  to 
comply  with  the  90%  or  100%  clauses. 

The  insured  should  be  cautioned  and  made  to  clearly  under- 
stand that  when  the  distribution  clause  is  used  he  must  carry 
sufficient  insurance  in  the  aggregate  to  supply 
What  Is  his  requirements  in  any  particular  building  or 

Necessary  location  as  to  the  amount  of  indemnity  needed, 
knowing  that  whatever  amount  of  insurance  is 
maintained  in  proportion  to  the  total  value  of  the  property 
covered  will  apply  in  the  same  relative  proportion  to  the 
value  of  such  property  in  each  specific  building  or  location. 
Also  that  he  must  carry  enough  insurance  to  value  in  the 
aggregate  to  supply  his  needs  with  reference  to  the  coinsur- 
ance clause  if  one  is  attached  to  his  policies.  Sometimes  the 
distribution  clause  is  used  with  the  90%  coinsurance  clause, 
but  it  is  not  used  with  the  100%  clause  for  obvious  reasons. 


168  THE  AGENTS   KEY   TO   FIRE  INSURANCE 

There  is  no  disadvantage  to  the  insured  in  the  use  of  a 
blanket  form  with  the  distribution  clause  and  the  80% 
clause,  as  compared  with  a  form  covering  specifically  each 
separate  building  and/or  contents  with  the  80 7o  clause,  assum- 
ing that  the  same  relative  amount  of  insurance  is  to  be  main- 
tained in  each  case;  nor  as  compared  with  a  blanket  form 
and  the  100%  clause  (except  that  he  may  have  less  insur- 
ance) :  But  there  is  one  disadvantage  as  compared  with  a 
blanket  form  and  the  90%   clause  without  the  distribution 

clause,  viz.,  that  when  the  90To  clause  alone  is 
Disadvantage  used,  and  the  insurance  maintained  is  not  less 

than  90%  of  the  total  value  of  all  the  prop- 
erty covered,  then  if  the  property  covered  in  any  one  loca- 
tion is  entirely  destroyed  by  fire  the  whole  amount  of  the 
policy  applies  thereon  and  therefore  the  entire  loss  is  paid 
out  of  the  insurance,  whereas  if  the  distribution  clause  also 
were  used  the  insurance  would  apply  on  such  property  only 
in  the  same  proportion  that  the  whole  insurance  bore  to  the 
whole  value,  and  the  available  insurance  might  therefore  be 
exhausted  before  the  entire  loss  was  paid  subject  to  the  dis- 
tribution clause.  For  example,  6  buildings  valued  at  $40,000, 
insurance  $36,000,  value  building  destroyed  $10,000,  loss 
$10,000,  insurance  applying  $9,000,  insurance  pays  $9,000. 

PRO  RATA  CLAUSE 

This  clause  commonly  reads :  *  *  This  policy  covers  pro  rata 

of  each  of  the  above  amounts  aggregating  $ , '  ^  and 

means  that  the  amount  of  the  policy  applies  on  each  item  in 
the  same  percentage  that  the  whole  amount  of  the  policy  bears 
to  the  whole  amount  of  the  items.  For  example,  if  a  $5,000 
policy  applies  pro  rata  over  items  aggregating  $20,000,  then 
5/20  or  1/4  of  the  policy  will  apply  on  each  item,  which  is 
illustrated  as  follows: 

Item  1  $9,000  Policy  covers  $2,250 
Item  2  7,000  Policy  covers  1,750 
Item   3       4,000     Policy   covers     1,000 


Total       $20,000     Policy   covers   $5,000 

It  will  be  seen  therefore  that  the  pro  rata  clause  makes  the 
policy  apply  specifically  and  proportionately  on  each  item, 
and  this  is  true  whether  the  amount  of  the  policy  is  greater  or 
less  than  the  aggregate  of  the  items. 

If  the  foregoing  example  be  reversed,  it  will  illustrate  the 
latter;  thus  a  $20,000  policy  applies  pro  rata  over  items  aggre- 


IMPORTANT  CLAUSES    ( COINSURANCE  AND  OTHERS)     169 

gating  $5,000  and  then  20/5  or  four  times  the  policy  will 
apply  on  each  item,  which  is  illustrated  as  follows: 

Item  1  $2,250  Policy  covers  $9,000 
Item  2  1,750  Policy  covers  7,000 
Item   3     1,000     Policy   covers       4,000 


Total      $5,000    Policy   covers  $20,000 

Sometimes  it  is  the  desire  not  to  have  the  form  disclose  how 
large  an  amount  of  insurance  is  carried,  and  for  this  reason 
the  amount  stated  in  the  form  as  applying  on  each  item  will 
be  less  than  the  actual  amount  of  insurance  carried  on  such 
item.  A  favorite  method  is  to  make  each  item  of  the  form 
show  some  fraction  of  the  real  amount  of  insurance,  for  in- 
stance, one-quarter;  thus,  if  the  real  amount  under  all  the 
items  aggregates  $200,000,  then  the  amount  filled  in  for  each 
item  is  1/4  of  the  real  amount  applying  on  such  item,  and 
the  sum  of  the  items  is  $50,000.  Each  policy  stipulates  that 
it  covers  pro  rata  of  all  the  items,  and  a  total  of  $200,000 
insurance  is  then  written  under  such  form.  If  during  the 
term  of  the  insurance  an  increased  amount  is  needed  on  any 
one  item,  it  is  usually  simpler  to  place  separate  insurance 
covering  specifically  on  such  item  for  the  additional  amount 
required  rather  than  to  change  the  item  on  all  of  the  pro  rata 
policies. 

THREE-FOURTHS  VALUE  AND  THREE-FOURTHS  LOSS 
CLAUSES 

In  some  sections  of  the  United  States  a  clause  is  required 
limiting  recovery  either  to  three-fourths  of  the  cash  value  of 
property  covered,  or,  to  three-fourths  of  any  loss  sustained, 
the  object  being  to  eliminate  moral  hazard  in  so  far  as  that 
may  be  accomplished  by  making  the  insured  sustain  a  part 
of  any  loss  that  occurs.  These  clauses  are  variously  worded, 
the  following  being  commonly  used  forms: 

THREE-FOURTHS  VALUE  CLAUSE 

''It  is  a  part  of  the  consideration  of  this  policy  and  the 
basis  upon  which  the  rate  of  premium  is  fixed,  that,  in 
the  event  of  loss,  this  company  shall  not  be  liable  for  an 
amount  greater  than  three-fourths  of  the  actual  cash 
value  of  the  property  covered  by  this  policy  at  the  time 
of  such  loss,  and  in  case  of  other  insurance,  whether 
policies  are  concurrent  or  not,  then  for  only  its  PRO 
RATA  proportion  of  such  three-fourths  value. 


170  THE  AGENTS   KEY   TO   FIRE  INSURANCE 

If  this  policy  be  divided  into  two  or  more  items,  the 
foregoing  conditions  shall  apply  to  each  item  separately. 

Total  insurance  permitted  is  hereby  limited  to  three- 
fourths  of  the  actual  cash  value  of  the  property  hereby 
covered  and  to  be  concurrent  herewith. '^ 

THREE-FOURTHS  VALUE  CLAUSE  (Another  Form) 

*'It  is  understood  and  agreed  to  be  a  condition  of  this 
insurance,  that,  in  the  event  of  loss  or  damage  by  fire  to 
the  property  insured  under  this  policy,  this  company  shall 
not  be  liable  for  an  amount  greater  than  three-fourths 
of  the  actual  cash  value  of  each  item  of  property  cov- 
ered by  this  policy  (not  exceeding  the  amount  insured 
on  each  such  item)  at  the  time  immediately  preceding 
such  loss  or  damage;  and  in  the  event  of  additional  in- 
surance, if  any  is  permitted  thereon,  then  this  company 
shall  be  liable  for  its  proportion  only  of  three-fourths 
such  cash  value  of  each  item  insured  at  the  time  of  fire, 
not  exceeding  the  amount  insured  on  each  such  item. 

$ other  insurance,  warranted  concurrent  here- 
with, permitted. 

It  is  understood  and  agreed  that  no  additional  insur- 
ance is  permitted  unless  amount  allowed  is  entered  in 
blank  space  in  paragraph  next  above." 

THREE-FOURTHS  LOSS  CLAUSE 

*'It  is  understood  and  agreed  to  be  a  condition  of  this 
insurance,  that,  in  the  event  of  loss  or  damage  under  this 
policy,  this  company  shall  not  be  liable  for  an  amount 
greater  than  three-fourths  of  such  loss  (not  exceeding 
the  sum  insured)  and,  in  the  event  of  additional  insur- 
ance permitted  thereon,  then  this  company  shall  not  be 
liable  for  an  amount  greater  than  its  proportion  of  three- 
fourths  of  such  loss ;  in  both  events  the  other  one-fourth 
to  be  borne  by  the  insured." 

The  essential  difference  between  the  two  clauses  is,  that, 
under  the  three-fourths  value  clause  the  company  is  liable  for 

any  loss  that  does  not  amount  to  more  than 
Explanation     three-fourths  of  the  actual  cash  value  of  the 

property  covered,  and  therefore  it  really  does 
not  operate  to  make  the  insured  stand  any  portion  of  his 
loss  unless  such  loss  exceeds  three-fourths  of  the  actual  cash 
value;  but,  under  the  three-fourths  loss  clause  the  company 


IMPORTANT  CLAUSES    (COINSURANCE  AND  OTHERS)     171 

is  liable  only  for  three-fourths  of  any  loss  that  occurs,  and 
the  insured  bears  one-fourth  of  any  loss.  It  will  be  seen, 
therefore,  that  the  three-fourths  loss  clause  should  act  as  a 
^eater  deterrent  to  carelessness,  and  presumably  has  a 
greater  moral  effect  than  the  three-fourths  value  clause. 

TWO-THIRDS  VACANCY  CLAUSE. 

Vacancy,  and  to  a  less  extent  unoccupancy,  is  recognized  as 
increasing  the  hazard  of  fire.  With  both  there  is  the  danger 
that  tramps,  or  boys,  or  other  unauthorized  persons,  may 
enter  premises,  and,  by  carelessness  or  with  malicious  intent, 
set  fire  thereto.  Then,  too,  property  deteriorates  rapidly  un- 
less it  is  in  use  and  thus  values  are  reduced, — such  a  condi- 
tion always  creating  a  potential  moral  hazard. 

Frequently  a  charge  is  made  for  either  vacancy  or  unoccu- 
pancy, but  in  lieu  of  a  charge  the  two-thirds  vacancy  clause 
is  sometimes  attached  to  the  policy  continuing  it  in  force  for 
only  two-thirds  of  its  amount  or  for  only  two-thirds  of  any 
loss  during  the  time  of  such  vacancy  or  unoccupancy. 

Two  forms  of  clauses  are  given  herewith : 

Two-Thirds  Vacancy  Clause.  '  *  The Insur- 
ance Company  hereby  consents  that  the  building  above 
described  may  remain  vacant  for  a  period  of  not  ex- 
ceeding   days  from  date  hereof,  to  expire  at  noon. 

And  in  consideration  of  the  increased  hazard  occasioned 
by  vacancy,  and  in  lieu  of  additional  premium  therefor, 
it  is  hereby  AGREED  that  while  the  premises  so  remain 
vacant  under  this  permit  the  amount  of  insurance  under 
this  policy  shall  be  reduced  one-third ;  and  when  attached 
to  a  policy  covering  more  than  one  item,  the  amount  of 
insurance  on  each  item  shall  be  considered  as  having  been 
reduced  to  the  extent  above  named.  This  permit  is  given 
and  accepted  under  the  foregoing  conditions.'* 

Two-Thirds  Vacancy  or  Unoccupancy  and  Loss  Clause. 

"Permission  is  hereby  given  that  the  premises  described 

herein  may  remain  vacant  or  unoccupied  from  the 

day  of 19 . . ,  to  the day  of 

19 . . ,  at  noon. 

And  in  consideration  of  the  increased  hazard  by  reason 
of  such  vacancy  or  unoccupancy  it  is  hereby  understood 
and  agreed,  that,  during  such  vacancy  or  unoccupancy 


172  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

ONE-THIRD  of  the  amount  of  the  insurance  hereunder 
shall  be  and  remain  suspended  and  of  no  effect,  and  in 
case  of  loss  this  company  shall  not  be  liable  to  pay  or 
make  good  to  the  insured  exceeding  TWO-THIRDS  of 
the  amount  insured  on  said  premises,  not  exceeding 
TWO -THIRDS  of  the  amount  of  loss  or  damage  there- 
to.'^ 

To  either  of  the  above  clauses  other  conditions  are  some- 
times added,  for  example: 

''Provided,  also,  that  while  said  building  is  vacant  (or 
unoccupied),  the  doors  and  windows  shall  be  securely 
fastened,  and  the  premises  be  in  charge  of  a  competent 
person  who  shall  from  time  to  time  personally  examine 
the  same/' 

"It  is  understood  and  agreed  between  this  company 
and  the  insured  that  the  building  shall  be  under  the 
supervision  and  care  of  some  competent  person  during 
such  time,  and  the  doors  and  windows  securely  closed 
and  locked  or  bolted,  and  all  rubbish  removed  from  said 
building;  otherwise  this  policy  is  null  and  void." 


CHAPTER  XV 

SPECIAL  KINDS  OF  INSURANCE 
(SIDE  LINES) 

Aircraft — Automobile — Crop — Earthquake — Explo- 
sion, Riot  and  Civil  Commotion  (Including 
Strike) — Flood — Hail — Mail  Package  (Parcel 
Post) — Radium — Rain — Registered  Mail — Sales- 
men's Samples — Sprinkler  Leakage — Tornado — 
Tourist  Baggage — Transportation — Water  Dam- 
age. 

Aircraft  Insurance.  The  marked  developments  in  design- 
ing, manufacturing  and  flying  heavier-than-air  machines  that 
took  place  during  the  war  have  led  to  greatly  increased  use 
since  then  of  both  aeroplanes  and  hydroplanes  for  pleasure 
and  commercial  purposes.  In  turn  this  has  brought  a  de- 
mand for  the  various  forms  of  insurance  now  being  granted 
by  some  of  the  stock  fire  insurance  companies. 

Under  a  special  form  of  policy  following  quite  closely  the 
phraseology  of  the  automobile  form  protection  is  given 
against  loss  by  fire,  theft,  collision  and  property  damage 
and,  by  special  endorsement,  losses  from  windstorm  and  from 
mooring  perils  (seaplane)  and  other  special  risks. 

The  rates  are  high  and  vary  according  to  the  classification 
of  the  pilot  as  regards  his  training,  experience  and  record. 
At  present  (1922)  all  policies  contain  the  three-quarters  loss 
clause  and  there  are  various  other  special  clauses  and  pro- 
visions that  are  made  a  part  of  the  contract  as  may  be 
necessary  or  required. 

Insurance  may  be  obtained  not  only  to  cover  the  owner 
of  the  plane  for  property  damage  he  may  cause,  but  also 
to  cover  the  propertyholder  against  loss  due  to  falling  or 
unmanageable  planes.  The  demand  for  the  latter  cover  was 
stimulated  by  the  disaster  in  Chicago  where  an  aircraft 
crashed  into  the  dome  of  the  Illinois  Trust  Company  in  the 
heart  of  the  city,  killing  several  people  and  causing  a  con- 
siderable property  loss. 

173 


174  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

Automobile  Insurance.  Under  this  general  term  is  in- 
cluded insurance  of  all  motor  vehicles,  whether  electric, 
gasoline  or  steam,  and  whether  pleasure  or  business  cars, 
trucks,  tractors  or  motorcycles. 

The  premium  account  for  this  class  of  business  has  become 
a  large  one,  having  been  over  $80,000,000  in  1921.  It  is 
estimated  that  there  are  10,291,674  motor  vehicles  in  use 
(1922)  in  the  United  States  and  that  only  one  in  four  is 
insured,  so  the  field  for  developing  further  business  is  a 
large  and  growing  one.  The  great  bulk  of  cars  are  of  the 
pleasure  type,  gasoline  driven  and  individually  owned. 

Automobile  insurance  is  written  by  stock  fire  insurance 
companies  and  also  to  some  extent  by  mutuals  and  re- 
ciprocals. 

Two  special  forms  of  policies  are  now  (1922)  in  current 
use,  one  covering  against  the  perils  of  fire  and  transporta- 
tion, the  other  fire,  transportation  and  theft;  by  special 
endorsement  liability  for  collision  and  for  property  damage 
may  be  assumed  under  either. 

The  fire  and  transportation  policy  covers  the  automobile 
and  its  equipment  wherever  it  may  be  in  the  United  States 

and  Canada  against  loss  by  fire  arising  from 
Fire  and  any  cause  whatsoever  and  lightning;  also  while 

Transpor-  being  transported  in  any  conveyance  by  land 
tation  or   water   caused   by   the   stranding,   sinking, 

collision,  burning  or  derailment  of  such  con- 
veyance, including  general  average  and  salvage  charges  for 
which  the  insured  is  legally  liable. 

The  fire,  transportation  and  theft  policy  covers  the  same 
perils  and  in  addition  loss  by  theft,  robbery  or  pilferage, 
excepting  theft,  robbery  or  pilferage  by  any 
Fire,  Trans-     person  or  persons  in  the  insured's  household 
portation  or   in   the   insured's    service   or    employment, 

and  Theft  whether  such  theft,  robbery  or  pilferage  oc- 
curs during  the  hours  of  such  service  or  em- 
ployment or  not;  the  wrongful  conversion,  embezzlement,  or 
secretion  bj'^  a  mortgagor  or  vendee  in  possession  under  mort- 
gage, conditional  sale  or  lease  agreement;  and  in  any  case, 
other  than  in  case  of  the  theft  of  the  entire  automobile 
described  herein,  the  theft,  robbery  or  pilferage  of  tools  and 
repair  equipment. 

Each  form  of  policy  contains  a  somewhat  extended  de- 


SPECIAL  KINDS   OF   INSURANCE    (SIDE    LINES)  1T5 

scription  of  the  automobile  and  certain  facts  in  relation  to 
its  ownership,  intended  uses  and  where  it  is  customarily  kept. 
There  are  various  provisions  and  conditions  affecting  liability 
of  the  company  and  recovery  by  the  insured,  all  intended 
to  make  a  clear  and  equitable  contract. 

Collision  liability  may  be  assumed  by  special  endorsement 
and  covers  loss  or  damage  by  accidental  collision  excepting: 

(1)  Loss  or  damage  to  any  tire,  due  to  puncture,  cut, 

gash,  blowout  or  other  ordinary  tire  trouble;  and 

excluding  in  any  event  loss  or  damage  to  any 

Collision  tire,  unless  caused  in  an  accidental  collision 

which  also  causes  other  loss  or  damage  to 

the  insured  automobile; 

(2)  Loss  or  damage  occurring  while  the  automobile  in- 

sured is  engaged  in  any  race  or  speed  contest  or 
while  being  operated  by  any  person  under  the 
age  limit  fixed  by  law  or  in  any  event  under  the 
age  of  sixteen  years. 

There  is  also  a  provision  that  the  amount  recoverable  for 
accidental  collision  shall  not  exceed  the  actual  cash  value 
of  the  property  at  the  time  of  any  loss  or  damage,  but  shall 
not  be  limited  by  the  amount  of  insurance  named  in  the 
policy.  This  means  that  if  a  policy  is  written  for  $1,200 
fire,  transportation  (and  theft)  on  a  car  actually  worth 
$2,000  which  was  totally  wrecked  by  collision  that  the  com- 
pany would  be  liable  for  $2,000.  Collision  claims  may  be 
cumulative  without  limit  as  to  the  number  of  accidents  during 
the  policy  year.  Collision  insurance  is  charged  for  on  the 
basis  of  a  stated  premium  for  a  particular  car  rather  than  a 
stated  rate  per  hundred  dollars  of  insurance  and  the  formula 
for  arriving  at  such  stated  premium  considers  the  type,  age 
and  average  value  of  each  kind  and  model  of  automobile 
manufactured. 

In  addition  to  the  liability  assumed  for  the  full  collision, 

forms   are   also   in   use  which   contain   a   deductible   clause 

reading    as    follows:     **The    perils    insured 

Deductible       against  hereunder  include  accidental  collision 

Clause  where  the  damage  from  such  collision  to  the 

automobile  and/or  equipment  herein  described 

is  in  excess  of  $ "   (either  $50  or  $100  as  the 

case  may  be)  *'€ach  accident  being  deemed  a  separate  claim 
and  said  sum  to  be  deducted  from  the  amount  of  each  claim 
when  determined." 


176  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

Property  damage  liability  may  be  assumed  by  special  en- 
dorsement which  covers  the  insured's  legal  liability  to  other 
persons  for  the  injury  to  or  destruction  of  the 
Property  property  of  such  persons  (including  resultant 

Damage  loss  of  use  of  such  property),  and  in  addition 

thereto  the  legal  expenses  incurred  by  the 
insured  with  the  consent  of  this  Company  in  connection 
with  such  injury  or  destruction,  resulting  solely  and  directly 
from  the  ownership,  maintenance  or  use  of  the  automobile 
herein  described,  provided  such  injury  or  destruction  occurs 
during  the  period  covered  by  this  policy,  subject,  however, 
to  the  following  limitations  and  exclusions : 

(1)  Property  of  the  insured,  or  in  charge  of  the  insured 

or  of  any  of  his  employees,  or  carried  in  or  upon 
the  automobile  described  herein,  is  excluded  from 
this  coverage; 

(2)  This  company's  liability  for  injury  or  destruction 

is  limited  to  the  actual  cash  value  of  the  property 
destroyed  at  the  time  of  its  destruction  and/or 
the  actual  cost  of  the  suitable  repair  of  the  prop- 
erty injured,  but  in  no  case  shall  this  company  be 
liable  with  respect  to  claims  (including  claims 
for  loss  of  use)  arising  from  one  accident  for 
more  than  $1,000,  and  in  addition  thereto  the 
legal  expenses  incurred  by  the  insured  with  the 
consent  of  this  Company. 

(3)  The    insurance    under    this    endorsement    does    not 

attach  or  cover  while  the  automobile  insured  is 
engaged  in  any  race  or  speed  contest,  or  while 
being  operated  by  any  person  under  the  age  limit 
fixed  by  law  or  in  any  event  under  the  age  of 
sixteen  years. 

[Note :  Additional  insurance  for  a  greater  sum  than  $1,000 
in  any  one  accident  may  be  secured  by  the  payment  of  a 
slightly  higher  premium.] 

For  rate  making  purposes,  motor  vehicles  are  divided  into 
four  general  classes,   (1)   private  passenger  cars,   (2)   com- 
mercial cars,   (3)   public  automobiles  and   (4) 
Rating  dealers'    and   manufacturers'    cars.     Manuals 

are  published  containing  all  the  rates,  rules 
and  forms  for  all  cars  included  in  these  groups  that  are  on 
the  market  and  in  use,  showing  the  year  of  manufacture  of 


SPECIAL  KINDS  OF  INSURANCE   (SIDE  LINES)  17? 

the  various  models  with  their  horse  power,  list  price,  etc., 
for  each  make. 

A  large  variety  of  special  forms,  rates  and  rules  has  been 
developed  to  care  for  the  various  conditions  of  the  business 
and  the  uses  to  which  motor  vehicles  have  been  adapted. 
Special  forms  and  rates  are  used  for  dealers'  open  policies, 
manufacturers'  output  and  others,  and  special  rates  apply  to 
Fire  Department  apparatus,  hearses,  ambulances,  patrol 
wagons  and  street  sweepers,  oil  trucks  and  commercial  fleets 
of  ten  or  more  cars. 

There  are  also  a  number  of  special  endorsements  that  may 
be  attached  to  policies  under  certain  conditions.  Among 
these  may  be  mentioned: 

Additional  Body, 
Bumper, 

Equipment  Exclusion, 
Fire  Extinguisher, 
Livery  and  Renting, 
Locking  Device, 
Monthly  Reduction, 
Pilferage, 
Speed  Contest, 
Personal  Effects. 

Automobile  Diminishing  Clause  (used  in  some  territories). 
'*It  is  a  part  of  the  consideration  for  which  this  policy  is 
issued  that  the  amount  of  insurance  in  force  thereunder 
shall  be  reduced  (without  return  of  premium  or  further 
endorsement)  by  2%  of  the  original  amount  at  the  end  of 
each  calendar  month  during  the  first  year  and  by  1%  of 
the  original  amount  at  the  end  of  each  calendar  month 
thereafter. 

The  amount  of  insurance  in  force  at  any  time  shall  be 
considered  as  a  maximum  only  and  shall  in  no  way  be  con- 
strued as  fixing  a  value  on  the  automobile  insured  hereunder, 
it  being  understood  and  agreed  that  in  case  of  loss  the 
terms  and  conditions  of  the  policy  relating  to  adjustment  and 
appraisal  shall  remain  in  full  force  and  effect." 

Insurance  may  also  be  procured  on  automobiles  against 
loss  by  tornado,  earthquake,  explosion,  riot  and  civil  commo- 
tion, hail,  water  damage  and  other  similar  perils,  all  of  which 
are  assumed  under  a  special  endorsement  attached  to  the 
regular  automobile  policy. 


178  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

Automobile  insurance  rates,  forms,  rules  and  requirements 
have  been  in  a  state  of  flux  for  some  years,  for  it  is  of  such 
recent  origin  and  marked  growth  that  it  has  been  difficult 
to  keep  pace  with  the  public  requirements,  but  practices  are 
gradually  approaching  a  more  stable  condition,  and  should 
reach  an  equilibrium  before  long. 

Because  of  the  frequent  changes  in  rates  and  forms,  it  is 
necessary  for  agents  and  brokers  to  make  sure  at  all  times 
that  they  have  the  latest  information  promulgated. 

Crop  Insurance.  There  have  been  several  attempts  on  the 
part  of  mutual  and  stock  companies  to  insure  growing  crops 
against  damage  from  various  and  sundry  causes,  but  so  far 
these  have  not  been  successful  from  all  standpoints  and  the 
sale  of  such  indemnity  upon  well  settled  principles  has  not 
yet  been  developed  to  a  point  where  it  is  readily  available 
upon  satisfactory  terms  and  under  a  satisfactory  contract 
to  all  purchasers.  There  have  been  three  general  plans  tried. 
The  first  plan  contemplated  insurance  covering  all  the 
hazards  to  which  crops  are  subject  with  the  exception  of 
fire,  fioods,  winterkill  and  failure  on  the  part  of  the  farmer 
to  properly  till  and  care  for  his  crops,  the  amount  of  in- 
surance being  fixed  at  a  uniform  sum  for  each  acre  insured. 

Under  the  second  plan  the  amount  of  insurance  to  be 
written  per  acre  was  fixed  on  the  basis  of  actual  investment 
in  the  crop  by  placing  a  specified  value  on  each  operation 
in  preparing  the  soil  and  tilling  and  harvesting  the  crop, 
then  adding  to  this  sum  a  reasonable  allowance  for  seed  and 
rental  value  of  the  land.  It  undertook  to  insure  loss  or 
damage  by  the  elements,  including  frost,  winterkill,  flood 
and  drought,  and  from  insects  or  disease,  but  not  if  resulting 
from  fire,  hail,  wind,  tornado,  failure  of  the  seed  to  germinate, 
or  failure  on  the  part  of  the  farmer  to  properly  do  his  part 
in  seeding,  cultivating  or  harvesting  the  crop. 

Under  the  third  plan  the  basis  for  determining  the  amount 
of  insurance  is  the  average  yield  during  the  past  five  years 
together  with  the  price  of  the  product  during  the  same 
period. 

The  rates  that  have  been  charged  average  around  7  or 
8%  and  the  following  are  some  of  the  provisions  which 
have  been  contained  in  the  specially  prepared  policies  used 
for  this  class  of  indemnity. 

''In  case  the  crop  insured  hereunder  shall  be  totally 
destroyed  and/or  abandoned  by  reason  of  any  of  the  hazards 


SPECIAL  KINDS   OF  INSURANCE    (SIDE   LINES)  179 

insured  against,  before  the  time  of  harvest,  the  liability  of 
this  company  shall  not  exceed  75%  of  the  cost  of  crop 
operations  actually  performed  up  to  the  time  of  such  total 
destruction  or  abandonment,  nor  more  than  75%  of  the 
amount  insured  hereunder/' 

''If  at  the  time  of  harvest  and/or  threshing  the  crop 
yield  by  reason  of  any  other  hazards  insured  against  does  not 
equal  or  exceed  in  quantity  the  estimated  yield  set  forth  in 
the  insured's  application,  the  company's  liability  for  de- 
ficiency in  crop  yield  shall  not  exceed  that  proportion  of 
the  amount  insured  hereunder  that  the  deficiency  in  the 
crop  yield  below  the  estimated  yield  bears  to  the  estimated 
yield,  but  in  no  event  shall  this  company  be  liable  for 
deficiency  in  crop  yield  in  case  the  crop  harvested  shall,  by 
standard  measure,  or  in  the  case  of  a  crop  which  requires 
to  be  threshed,  by  threshing  machine  measure,  equal  or 
exceed  the  estimated  yield  set  forth  in  the  insured's  applica- 
tion attached  hereto. 

"It  at  the  time  of  harvest  and/or  threshing  it  shall  be 
proved  by  the  insured  that  the  crop  harvested  has  suffered 
damage  in  quality  by  reason  of  any  of  the  hazards  insured 
against  hereunder,  the  liability  of  this  company  for  such 
damage  shall  not  exceed  the  same  percentage  of  the  amount 
of  insurance  remaining,  after  deducting  from  the  total 
amount  insured,  the  amount,  if  any,  allowed  for  deficiency 
in  crop  yield  as  the  ascertained  percentage  of  damage  to 
the  ci*op  harvested. 

''In  no  event  shall  the  liability  of  this  company  exceed 
what  it  would  cost  at  the  time  of  harvest  and/or  threshing 
to  replace  or  make  good  any  part  or  all  of  the  estimated 
yield  set  forth  in  the  application  with  products  of  like  kind 
and  sound  quality;  no  more  than  the  amount,  if  any,  by 
which  the  amount  insured  shall  exceed  the  market  value  of 
the  crop  harvested." 

The  Government  has  interested  itself  in  this  subject  and 
published  bulletin  No.  1043  of  the  Department  of  Agriculture 
as  of  January  23rd,  1922,  which  goes  into  considerable  ex- 
planation of  the  whole  subject. 

The  real  need  for  crop  investment  insurance  comes  not 
only  from  the  farmer  but  also  from  bankers  and  merchants 
who  are  interested  as  creditors  to  a  large  extent  dependent 
on  successful  crops  for  the  liquidation  of  debts  for  money 
loaned  or  goods  sold  on  credit.    A  plan  for  crop  insurance 


180  THE  AGENTS   KEY   TO  FIRE  INSURANCE 

which  is  equitable,  economical  and  practical  would  tend  to 
place  farming  on  a  better  business  basis  than  it  can  be 
where  the  farmer  himself  takes  the  whole  risk  of  loss  by 
drought,  insects  or  other  perils. 

Earthquake  Insurance.  This  form  of  insurance  has  a  very 
limited  demand,  being  confined  almost  exclusively  to  the 
Pacific  Coast.  When  written,  the  standard  fire  policy  is  used 
with  a  special  form  which  provides : 

That  the  word  earthquake  shall  be  substituted  for  the  word 
fire  wherever  the  latter  occurs  in  the  printed  portions  of  the 
policy; 

That  the  Company  shall  not  be  liable  for  loss  or  damage 
caused  by  fire,  whether  the  fire  be  caused  by  earthquake  or 
otherwise ; 

That  if  the  property  be  damaged  or  destroyed  partly  by 
earthquake  and  partly  by  fire,  the  Company  shall  not  be 
liable  for  a  greater  amount  than  the  difference  between  the 
actual  cash  value  of  the  property  at  the  time  of  such  loss  or 
damage  and  the  actual  cash  value  of  the  portion  of  said  prop- 
erty destroyed  by  fire. 

In  addition  to  the  foregoing,  certain  provisions  of  the 
printed  portions  of  the  policy  are  eliminated,  being  the  cease 
operations,  the  mechanics,  the  fallen  building,  and  the  va- 
cancy or  unoccupancy  clauses,  and  those  provisions  relating 
to  illuminating  gas,  and  the  keeping  of  certain  enumerated 
articles,  such  as  benzine,  fireworks,  etc. 

The  1%  Loss  Exemption,  and  the  70%  Coinsurance  Clauses 
are  attached;  otherwise  the  contract  is  subject  to  the  printed 
conditions  of  the  fire  policy. 

Rates  on  the  Pacific  Coast  vary  according  to  construction 
of  buildings,  these  being  divided  into  four  classes,  the  rates 
applying  with  70%  clause  run  from  about  12i/^  cents  to 
32  cents. 

Contents  are  divided  into  two  classes  according  to  esti- 
mated damageability  by  earthquake  and  rates  are  25%  and 
50%  respectively  higher  than  the  rate  for  building  they 
are  in. 

Explosion,  Riot  and  Civil  Commotion  (sometimes  called 
*' Strike '^  insurance).  This  class  of  indemnity,  inaugurated 
in  somewhat  different  form  during  the  late  war,  is  given 
permanent  value  and  salability  by  the  complexities  and 
problems  of  present  business  and  social  conditions. 


SPECIAL    KINDS    OF    INSURANCE    (siDE    LINES)         181 

The  developments  that  have  accompanied  modern  manu- 
facturing methods,  processes  and  machinery  and  the  in- 
creasing use  of  various  chemicals  and  of  gasoline,  naphtha, 
acetylene  and  oil  fuel,  bring  possibilities  of  explosion  for- 
merly unknown  or  rare,  so  that  severe  damages  not  covered 
by  the  regular  fire  insurance  policy  may  easily  occur. 

The  industrial  and  social  disorders  developed  by  present 
conditions,  and  the  large  numbers  of  different  nationalities 
existing  among  our  population  and  not  yet  assimilated  pro- 
vide an  ever  present  potentiality  for  trouble;  agitation  or 
resentment  over  real  or  fancied  grievances  may  easily  find 
an  outlet  in  crime  and  violence  resulting  in  destruction  of 
valuable  property.  There  have  been  notable  instances  of 
these  eventualities  in  the  past,  such  as  bombing  of  newspaper 
offices  and  the  homes  of  public  officials,  judges,  capitalists 
and  heads  of  large  industries;  in  the  Wall  Street,  New  York, 
bomb  explosion,  the  Youngstown,  Ohio,  disturbances,  the 
Boston  strike  and  the  race  riots  at  various  points.  No  one 
can  tell  when  or  where  the  next  outbreak  may  occur  or 
how  serious  it  may  be. 

Losses  from  explosion  or  riot  and  civil  commotion  are  not 
covered  under  the  Standard  Fire  Policy  which  states: 
'^This  company  shall  not  be  liable  for  damage  occur- 
ring by  explosion,  unless  fire  ensues,  and  in  that  event, 

for  loss  or  damage  by  fire  only." 

*'Nor  for  loss  or  damage  caused  directly  or  indirectly 

by  invasion,  insurrection,  riot,  civil  war  or  commotion 

or  military  or  usurped  power,  or  by  order  of  any  civil 

authority. ' ' 

The  demand  for  protection  against  such  losses  has  been 
met  by  the  preparation  of  special  forms  of  policies  that 
cover  as  follows: 

An  EXPLOSION  policy  covers  against  direct  loss  to  prop- 
erty by  explosion  whether  originating  on  the  premises  of 
insured  or  elsewhere,  occurring  from  accidental  or  malicious 
causes,  including  processes  of  work  and  materials.  It  ex- 
cludes only  explosion  originating  on  the  insured's  premises 
in  steam  boilers,  pipes,  fly  wheels,  engines  and  machinery 
connected  therewith,  which  are  intended  to  be  covered 
specifically  under  casualty  insurance  policies.  Explosion  from 
other  than  steam  piping  is  therefore  covered. 

A  RIOT  AND  CIVIL  COMMOTION  policy  gives  much 
more   complete  protection   since   it   covers   all  that  is  con- 


]82  THE    AGENTS    KEY    TO    FIRE    INSURANCE 

templated  under  an  explosion  policy  and  in  addition  covers 
riot,  insurrection  and  civil  commotion,  including  that  which 
may  come  about  through  a  strike.  Thus  it  oflcers  protection 
against  loss  of  property  by  explosion  and  by  industrial  dis- 
orders, including  destruction  of  buildings,  machinery  and 
stocks  by  mobs  or  by  employees  on  strike,  or  from  bombing, 
or  concerted  violence  arising  through  ignorance,  or  from 
vicious  or  anarchistic  sources. 

The  insurance  may  be  written  to  cover  building,  machinery 
and/or  stock  blanket,  or  any  one  of  them  specifically  if 
desired;  usually  the  50%  coinsurance  clause  is  required, 
with  further  credits  for  the  80%  or  100%  clauses. 

Policies  may  be  written  covering  rents,  and  rental  value, 
leasehold,  use  and  occupancy,  profits  and  commissions,  tor- 
nado, legal  liability  and  other  insurable  interests  as  well  as 
direct  property  damage.  The  rates  applying  differ  for  the 
various  classes  of  risks  and  at  present  (1922)  range  from 
5c.  per  $100.00  per  annum  upward. 

By  specific  endorsement  the  following  clauses  may  be  at- 
tached ; 

Conseauential  Loss  Clause.  *'This  insurance  being  other- 
wise against  only  direct  loss  or  damage  (in  consideration  of 
additional  rate  charged,  this  Company  also  assumes  liability 
not  exceeding  the  amount  of  this  policy  remaining  after  the 
liability  of  this  Company  for  any  direct  loss  or  damage  has 
been  determined)  for  any  loss  or  damage  to  the  property 
described  while  contained  in  the  above-named  building  or 
buildings  caused  by  change  of  temperature,  resulting  from 
the  total  or  partial  destruction  or  disablement  of  the  cooling 
apparatus,  connections  or  supply  pipe  by  explosion  or  other 
hazards  specifically  assumed  hereunder." 

Foundation  Clause.  ''Foundations  and  other  parts  of  the 
building  and  the  appurtenances  thereof,  which  are  below 
the  under  surface  of  the  lowest  basement  floor,  or,  where 
there  is  no  basement,  which  are  below  the  surface  of  the 
ground,  are  excluded  from  being  covered  by  this  policy, 
but  no  other  part  of  the  structure  or  of  the  appurtenances 
thereof  are  so  excluded." 

Glass  Breakage  Clause.  This  company  shall  also  be  liable 
for  loss  and/or  damage  to  glass  which  may  be  a  part  of 
the  buildings  insured,  to  an  amount,  however,  not  exceeding 
10%   of  the  value  of  such  buildings;   subject  in  all  other 


SPECIAL    KINDS    OF    INSURANCE    (siDE    LINES)         183 

respects  to  the  printed  conditions  of  this  policy  and/or 
conditions  attached  hereto,  but  in  no  event  shall  this  com- 
pany be  liable  for  a  greater  proportion  of  such  loss  or  damage 
than  the  amount  which  this  policy  bears  to  the  total  amount 
of  all  similar  insurance  whether  or  not  such  other  insurance 
shall  include  liability  for  loss  or  damage  to  glass. 

Thirty  Day  Notice  of  Cancellation  Clause.  The  8th  para- 
graph of  the  printed  conditions  of  this  policy  is  hereby 
amended  to  read  as  follows: 

''This  policy  shall  not  be  subject  to  cancellation  by 
.  the  insured  or  by  this  company  for  a  period  of  ninety 
days  beginning  with  the  date  of  this  policy,  but  there- 
after this  policy  shall  be  cancelled,  at  the  request  of 
the  insured,  provided  at  least  thirty  days'  previous 
notice  shall  have  been  given  in  writing  by  the  assured 
to  the  company,  of  the  desire  for  such  cancellation,  in 
which  case  the  company  shall  upon  demand  and  sur- 
render of  this  policy,  refund  the  excess  of  paid  premium 
above  the  customary  short  rates  for  the  expired  time, 
meaning  the  customary  short  rate  of  fire  insurance  prac- 
tice. This  policy  may  be  cancelled  by  the  company  after 
the  end  of  ninety  days,  by  giving  to  the  insured  a  thirty 
days'  written  notice  of  cancellation  with  or  without 
tender  of  the  excess  of  paid  premium  above  the  pro  rata 
premium  for  the  expired  time,  which  excess  if  not 
tendered,  shall  be  refunded  on  demand  and  surrender  of 
this  policy.  Notice  of  cancellation  shall  state  that  said 
excess  premium  (if  not  tendered)  will  be  refunded  on 
demand." 

Pillage  and  Looting  Clause.  ''It  is  a  condition  of  this  in- 
surance that  the  exclusion  of  loss  by  'theft'  in  the  printed 
conditions  of  this  policy  shall  not  be  construed  to  exclude 
direct  loss  from  pillage  and/or  looting,  when  such  pillage 
and/or  looting  occurs  during  and  at  the  immediate  place  of 
a  riot,  subject  in  all  respects  to  the  conditions  and  limitations 
of  this  policy." 

Absolute  Non-Cancellation  Clause.  In  consideration  of  the 
rate  of  premium  at  which  this  policy  is  written  it  is  stipu- 
lated and  made  a  condition  of  the  contract  that  this  policy 
shall  not  be  cancelled  during  its  term  by  either  of  the  par- 
ties hereto,  any  printed  conditions  in  this  policy  to  the  con- 
trary notwithstanding. 


184  THE  AGENTS   KEY   TO   FIRE  INSURANCE 

Flood  Insurance.  This  form  of  indemnity  is  of  recent 
origin  in  the  United  States,  but  there  is  a  very  considerable 
demand  for  such  protection  in  the  vicinity  of  rivers  and 
dams  and  along  the  sea  coast  and  an  increasing  amount  is 
being  sold  each  year. 

It  is  written  under  a  special  form  of  policy  which  covers 
against  all  direct  loss  or  damage  by  water  caused  by  flood, 
overflowing  rivers  and/or  tidal  wave  and  by  removal  from 
premises  so  endangered;  all  risks  of  fire  and  of  windstorm 
are  excluded. 

By  endorsement  the  policy  may  be  extended  to  cover  the 
accidental  discharge  or  leakage  of  water  from  water  supply 
mains  or  public  hydrants  located  outside  the  premises  and 
the  form  contains  a  stipulation  that  the  company  shall  not 
be  liable  for  loss  or  damage  arising  from  breakage  or  leakage 
from  any  system  of  piping  or  apparatus  for  the  use  of 
water,  including  the  standpipes,  hose,  automatic  sprinkler 
system,  and  all  accessories  thereto  within  the  building  or 
buildings,  it  being  the  intent  to  limit  the  liability  to  loss 
or  damage  caused  by  accidental  inflow  of  water  from  without, 
but  not  to  include  damage  due  to  roof  leakage  or  damage 
caused  by  rain  entering  windows,  or  sky  lights,  or  from 
choked  sewers,  or  damage  caused  by  the  fire  department  or 
fire  protection  apparatus. 

Customarily  basement  stocks  are  not  covered  under  the 
policy,  although  they  may  be  included  for  limited  amounts 
by  special  endorsement.  80%,  90%  or  100%  coinsurance 
clause  is  required.  The  policies  are  written  only  on  applica- 
tion and' premium  is  payable  in  advance.  Rates  vary  accord- 
ing to  location,  season  and  previous  flood  record. 

Hail  Insurance.  Hail  insurance  on  growing  crops  is  written 
throughout  the  United  States,  but  chiefly  in  the  grain  states 
west  of  the  Mississippi  River.  Special  forms  of  policies 
cover  against  loss  or  damage  by  hail  to  such  crops  as  wheat, 
rye,  corn,  hay  and  alfalfa  and  also  in  some  sections  fruit 
trees  and  tobacco. 

The  unit  is  usually  one  acre  and  the  limit  of  liability 
that  may  be  assumed  this  year  (1922)  is  $20.00  per  acre  on 
grain  on  non-irrigated  land  and  $30.00  per  acre  on  grain  on 
irrigated  land.  The  rate  runs  from  3%  to  as  high  as  20% 
in  some  sections.  Because  of  the  technical  nature  of  the 
adjustments  and  the  experience  necessary  for  this  work, 
losses  for  practically  all  companies  writing  the  class  in  the 


SPECIAL    KINDS    OF    INSURANCE    (siDE    LINES)         185 

Central  and  Western  States  are  adjusted  by  the  Western 
Adjustment  and  Inspection  Company  which  maintains  a 
special  force  for  this  purpose. 

The  business  is  seasonal,  insurance  being  taken  out  usually 
when  the  farmer  sees  he  has  a  crop  in  sight.  The  writing 
of  this  class  usually  starts  first  in  Texas  and  Oklahoma 
during  March  and  in  other  sections  at  later  dates  up  to 
July  in  North  Dakota.  All  policies  cease  to  cover  when  the 
crop  is  harvested,  but  in  any  event  terminate  on  September 
15th  or  October  1st  according  to  locality. 

Hail  insurance  on  other  property  than  growing  crops  is 
usually  assumed  in  connection  with  tornado  insurance  by 
attaching  to  the  tornado  policy  (not  to  a  fire  policy)  a  rider 
reading  as  follows: 

''In  consideration  of  $ extra  premium,  it 

is  made  a  condition  of  this  insurance  that  this  policy 
shall  cover  any  direct  loss  or  damage  to  the  property 
described  herein,  caused  by  Hail,  whether  accompanied 
by  wind  or  not;  provided,  however,  that  if  there  shall  be 
any  other  tornado  insurance  on  said  property,  this  com- 
pany shall  be  liable  only  pro  rata  with  such  other 
tornado  insurance  for  any  direct  loss  or  damage  caused 
by  Hail,  whether  such  other  tornado  insurance  covers 
direct  loss  or  damage  caused  by  Hail  or  not.  It  is  a 
further  condition  of  this  insurance  that  this  company 
shall  not  be  liable  for  loss  or  damage  caused  by  Hail 
to  hay,  grain  or  straw,  in  fields  or  in  stacks. ' ' 

Mail  Package  (Parcel  Post)  Insurance.  The  enormous 
number  of  packages  handled  by  the  Post  Office  Department, 
being  in  excess  of  1,000,000,000  annually,'  with  all  the  oppor- 
tunity for  loss  from  fire,  wreck,  theft,  breakage  and  non- 
arrival  due  to  various  causes,  has  led  to  the  development  of 
this  form  of  insurance,  which  is  becoming  of  growing  im- 
portance with  the  increase  in  this  convenient  and  inex- 
pensive form  of  shipping. 

The  opportunity  for  loss  has  been  recognized  by  the  United 
States  Government  which  maintains  a  system  of  insurance 
that  in  1921  is  said  to  have  paid  losses  amounting  to  over 
$5,000,000,  which  indicates  the  wide  field  that  exists  for 
the  sale  of  such  indemnity. 

For  the  occasional  shipper  the  Government  insurance  is 
probably  the  most  convenient,  but  for  those  shipping  goods 
regularly  by  mail  a  comparison  of  the  Government  method 


186  THE  AGENTS   KEY  TO   FIRE  INSURANCE 

with  that  of  the  insurance  company  may  disclose  advantages 
for  the  latter. 

Government  Method: — This  contemplates  that  a  package 
must  be  taken  to  the  Post  Office  and  receipt  obtained,  re- 
sulting in  time  being  spent  waiting  in  line  especially  at  busy 
hours  of  the  day  when  goods  are  most  apt  to  be  shipped. 
Collection  of  a  loss  claim  calls  for  considerable  delay  because 
of  the  routine  through  which  it  must  go  before  the  claim 
can  be  recognized  and  paid  by  the  Government. 

Insurance  Company  Method: — There  are  two  ways  of 
writing  this  class  of  insurance.  The  one  most  commonly 
used  is  called  the  '  *  certificate  method ' '  under  which  a  policy 
is  issued  with  a  book  of  100,  200  or  500  certificates  attached. 
To  insure  thereunder  the  name  and  address  of  consignee,  kind 
and  value  of  article  insured,  date  and  class  of  mail  by  which 
shipped  is  entered  on  the  certificate  stub  and  the  coupon 
detached  for  inclosure  with  package  or  invoice.  The  cost  of 
such  a  policy  usually  runs  from  5c.  to  10c.  per  coupon  or 
certificate. 

The  other  method  is  called  the  ''reporting  form"  and  is 
used  by  large  shippers.  The  policy  provides  for  reporting 
shipments  on  large  sheets  or  bordereaux  and  an  agreed  rate 
is  charged  for  insurance  equal  to  the  total  value  of  the 
goods  shipped.  A  deposit  premium  of  say  $100  is  required 
and  monthly  reports  of  shipments  are  made  to  the  company 
and  additional  premium  paid  after  the  initial  premium  is 
exhausted. 

Under  either  method  from  the  moment  a  package  passes 
into  the  custody  of  the  Post  Office,  either  through  delivery 
to  carrier,  or  deposit  in  the  collection  box,  or  at  the  Post 
Office  itself,  the  contents  are  insured  against  loss  due  to 
non-arrival  from  whatever  casualty  until  delivered  to  con- 
signee. By  either  of  these  methods  the  shipper  is  enabled 
to  preserve  in  convenient  book  form  the  necessary  record 
of  his  shipments  and  effects  insurance  in  his  own  premises, 
thus  avoiding  waste  of  time  and  cost  of  messenger  in  sending 
to  Post  Office. 

If  the  package  is  not  received  by  the  consignee  within 
a  reasonable  time,  or  is  delivered  in  damaged  condition,  claim 
is  made  on  company  or  its  agent  under  a  simple  form  and 
is  customarily  paid  without  delay. 

While  the  amount  of  premium  from  this  class  is  not  great 


SPECIAL    KINDS    OF    INSURANCE    (siDE    LINES)         187 

compared  with  some  other  lines,  it  is  steadily  increasing  and 
is  one  of  the  ways  of  helping  out  the  premium  account. 

Radium  Insurance.  Among  the  interesting  forms  of  in- 
surance called  for  by  modern  science  is  that  covering  the 
loss  of  radium.  This  valuable  product  is  in  use  by  doctors, 
surgeons  and  hospitals  and  very  tiny  quantities  cost  a  great 
deal  of  money;  radium  having  about  the  bulk  of  a  small 
bead  is  worth  $10,000. 

Insurance  thereon  is  issued  under  a  special  form  of  policy 
and  covers  against  all  risks  of  loss  or  damage,  while  within 
the  limits  of  the  United  States  and/or  Canada,  except  in- 
vasion, insurrection,  riot,  civil  war  or  commotion,  oi^  military 
or  usurped  power  or  risks  of  contraband  or  illicit  trade. 
*'A11  risks"  includes  fire,  lightning,  windstorm,  flood,  theft, 
breakage,  disappearance  and  other  causes. 

Practically  the  only  special  condition  in  the  form  is  one 
requiring  that  a  patient  being  treated  by  the  radium  insured 
shall  be  under  the  care  and  direction  of  a  doctor,  nurse  or 
other  attendant.  This  is  to  avoid  the  possibility  of  a  patient 
taking  off  the  bandages  because  of  irritation  or  other  cause 
and  losing  the  radium. 

Rain  Insurance.  The  sale  of  rain  insurance  is  of  quite 
recent  origin  in  this  country  although  it  has  been  in  vogue 
in  England  and  continental  Europe  for  some  years. 

It  is  written  under  a  special  form  of  policy  upon  applica- 
tion furnished  by  the  insured  through  agent  or  broker  and 
is  intended  to  provide  protection  against  loss  sustained 
because  of  rain,  snow,  hail  or  sleet. 

Outdoor  events,  whether  of  a  business  or  charitable  char- 
acter, are  largely  dependent  on  fair  weather  for  success. 
Often  in  preparing  for  an  event  considerable  sums  of  money 
are  spent  which  may  be  lost  if  rain  occurs,  to  say  nothing 
of  anticipated  profits.  In  many  legitimate  and  proper  ways 
rain  insurance  serves  the  useful  purpose  of  providing  in- 
demnity for  losses  that  cannot  be  avoided  otherwise. 

Various  forms  and  conditions  are  in  use,  but  in  a  general 
way  the  policy  provides  indemnity  for  loss  of  expenses, 
or  of  profit,  or  income,  or  gate  receipts  if  rain  falls  during 
certain  hours  of  a  given  day  or  during  several  stated  days. 
The  policy  stipulates  that  there  can  be  no  recovery  unless 
the  rainfall,  established  by  a  Government  observer,  is  at  least 
1/lOths  or  2/lOths  of  an  inch,  as  the  case  may  be,  during 
the  time  specified  in  the  policy. 


188  THE   AGENTS    KEY   TO   FIRE   INSURANCE  . 

For  obvious  reasons  no  order  is  accepted  unless  received 
and  paid  for  at  least  five  days  before  the  event  takes  place. 

The  business  is  of  a  hazardous  nature  not  subject  to  close 
calculation  and  liable  to  very  large  losses  if  there  is  wide 
spread  rain  on  such  days  as  May  30th,  July  4th  and  Labor 
Day.  The  rates  are  correspondingly  high,  ranging  from  4% 
upward.  If  recovery  is  based  on  1/10"  rainfall,  rates  are 
higher  than  if  based  on  a  greater  rainfall,  because  loss  might 
be  sustained  in  the  one  case  and  not  in  the  other.  Likewise 
the  longer  the  hours  covered  the  higher  the  rate  because  of 
the  greater  chance  of  loss  occurring.  Elaborate  and  care- 
fully worked  out  tables  of  rates  apply  to  the  various  sections 
of  the  country  and  to  various  seasons  of  the  year,  all  the 
result  of  detailed  study  of  Government  weather  reports  over 
a  series  of  years. 

The  opportunities  for  selling  rain  insurance  are  much 
greater  than  might  be  thought  on  first  consideration,  for 
instance,  all  of  the  following  are  natural  subjects  of  Rain 
insurance:  baseball  games;  state  and  county  fairs;  auto- 
mobile and  horse  races;  parades,  amusement  parks;  conces- 
sions of  all  kinds ;  block  parties ;  dances ;  church  and  fraternal 
fairs  and  entertainments;  athletic  meets;  football  games; 
tennis  tournaments;  prize  fights;  live  stock  sales;  horse 
fairs;  special  merchandise,  or  holiday  sales;  celebrations  of 
all  kinds,  and  any  event  whose  success  would  be  injured  by 
rainfall. 

Registered  Mail  Insurance.  Under  special  form  of  policy 
insurance  is  granted  against  loss  of  bonds,  coupons,  bank 
notes,  legal  tender,  certificates  of  stock,  and  similar  securi- 
ties, including  currency  and  postage  stamps,  sent  by  regis- 
tered mail  within  certain  prescribed  areas.  Such  policies 
usually  cover  against  loss,  however  caused,  whether  from 
fire,  lightning,  tornado,  theft,  wreck,  or  any  other  cause,  from 
the  time  of  deposit  and  registration  in  the  Post  OflSce  to  ar- 
rival at  the  place  of  address.  There  are  special  conditions 
which  differ  somewhat  in  the  policies  issued  by  the  various 
companies.  Usually  not  more  than  market  value,  or  a  slight 
percentage  in  excess  thereof,  is  recoverable. 

Salesmen's  Samples  Floater  Insurance.  The  samples  car- 
ried by  travelling  salesmen  often  run  into  large  values  and 
are  subject  to  loss  by  fire,  lightning,  collision,  derailment, 
theft  and  other  causes  and  this  has  led  to  the  development 
of  a  special  form  of  insurance  for  this   class.     It  is  sold 


SPECIAL    KINDS    OF    INSURANCE    (siDE    LINES)         189 

to  manufacturers,  wholesalers,  jobbers  and  selling  agents 
to  cover  all  samples  in  the  hands  of  all  their  salesmen 
against  such  losses  from  the  time  they  leave  the  premises 
of  the  insured  until  their  return,  subject  to  such  conditions 
as  may  be  made  a  part  of  the  policy  contract. 

Fires  are  frequent  in  hotels,  baggage  cars  and  railroad 
depots  and  accidents  often  happen  in  transportation  by  rail- 
road or  truck.  Hotel  keepers  and  truckmen  are  not  always 
financially  responsible  and  their  liability  is  somewhat  proble- 
matical, while  that  of  common  carriers  is  limited  by  law  to 
$100,  unless  at  the  time  of  shipment  a  higher  value  is 
declared  and  excess  charges  paid,  so  that  with  all  these 
factors  taken  into  account  the  insurance  offered  is  much 
better  and  more  certain  protection  at  much  less  cost. 

Usually  no  coinsurance  clause  is  required  on  policy,  but 
the  amount  of  insurance  applying  on  samples  in  the  hands  of 
any  one  salesman  is  limited  and  as  a  rule  companies  require 
that  the  total  insurance  carried  shall  be  approximately  90% 
of  the  estimated  value  of  goods  in  the  hands  of  all  salesmen 
at  any  one  time. 

Sprinkler  Leakage  Insurance.  This  form  of  insurance  has 
arisen  because  of  the  possibility  of  loss  by  water  leaking  from 
an  automatic  sprinkler  system.  A  special  form  of  policy  is 
used,  which  covers  against  all  direct  loss  or  damage  by  sprink- 
ler leakage,  but  not  damage  from  leakage  caused  directly  or 
indirectly  by  fire,  lightning,  cyclone,  tornado,  windstorm, 
earthquake,  explosion  or  blasting;  for  these  are  held  to  be 
covered  properly  under  fire,  tornado,  explosion  or  casualty 
policies;  neither  does  it  cover  against  loss  caused  directly  or 
indirectly  by  the  fall  or  collapse  of  any  building  or  any  part 
thereof,  unless  such  fall  or  collapse  is  caused  by  the  acci- 
dental leakage  of  water  from  the  automatic  sprinkler  system 
or  the  tanks  supplying  it;  as,  for  instance,  the  bursting  of  a 
pipe  that  results  in  the  washing  out  of  foundations,  thereby 
damaging  the  building  and  possibly  causing  it*  to  fall.  The 
policy  does  not  cover  loss  due  to  stoppage  or  interruption  of 
business,  nor  damage  caused  by  the  material  parts  of  a  tank 
in  falling,  unless  such  liability  is  specifically  assumed. 

Sprinkler  leakage  is  defined  as  leakage,  discharge  or  pre- 
cipitation of  water  from  the  automatic  sprinkler  system,  or 
tanks  supplying  it,  and  may  be  caused  by  freezing,  or  by 
mechanical  injury,  or  by  defective  joint  or  sprinkler  head,  or 
from  leaky  pipe  or  tank,  or  by  the  breaking  of  a  pipe,  or  by 
the  opening  of  a  sprinkler  head  without  apparent  cause. 


190  THE  AGENTS    KEY   TO   FIRE   INSURANCE 

As  a  rule,  sprinkler  leakage  insurance  is  made  binding  only 
upon  specific  authorization  by  the  company  or  its  field  men; 
policies  are  usually  issued  by  the  company  and  may  be  made 
to  cover  building  and/or  contents,  and  are  also  written  to 
cover  against  loss  of  use  and  occupancy  due  to  sprinkler 


Tornado  or  Windstorm  Insurance.  Special  forms  of  policies 
are  issued  to  insure  against  direct  loss  or  damage  to  building 
or  contents  by  tornado  or  windstorm ;  if  the  roof  is  blown  off, 
or  walls,  doors  or  windows  blown  in,  damage  by  water,  rain 
or  snow  entering  through  such  openings  is  also  covered. 

The  same  forms  that  are  used  on  fire  policies  may  generally 
be  used  on  the  regular  tornado  policies  for  describing  the 
property  covered,  subject  to  such  restrictive  or  qualifying 
clauses  and  conditions  as  are  locally  prescribed. 

The  50%  Coinsurance  Clause  is  in  general  use  on  tornado 
forms  except  in  states  where  coinsurance  is  prohibited. 

The  Lightning  Clause  should  not  be  attached  to  a  tornado 
policy,  and  the  permits  usuallj^  granted  when  issuing  a  fire 
policy  are  unnecessary  on  a  tornado  policy,  since  its  printed 
conditions  are  not  the  same  as  those  of  the  fire  insurance 
polic5\ 

Millions  of  dollars'  worth  of  property  is  destroyed  each 
year  by  tornadoes  or  windstorms.  Neither  city  nor  country  is 
secure  from  their  devastating  power;  they  constitute  the  one 
potentiality  for  property  loss  that  man  is  powerless  to  pre- 
vent or  mitigate. 

Tourist  Baggage  Insurance.  This  form  of  insurance  is 
intended  to  cover  personal  effects  outside  the  permanent 
residence  of  insured  against  loss  due  to  the  hazards  of  fire, 
theft,  lightning,  transportation  and  navigation.  It  not  only 
insures  the  traveller  while  away  from  home,  but  also  covers 
articles  usually  kept  at  golf,  country,  sporting  and  other 
clubs,  and  clothing  at  laundries,  cleaning  and  tailor  shops, 
and  effects  taken  on  automobile  trips,  week-end  parties  and 
other  outings.  Because  of  the  broad  and  liberal  cover  and 
the  many  possibilities  of  loss  from  which  it  protects  the 
insured,  an  increasing  amount  of  this  class  of  insurance  is 
being  carried  all  the  year  round,  rather  than  merely  when 
one  is  taking  a  trip.  The  following  two  forms  of  policies 
are  in  general  use: 

T.  A.  Limited  Cover: — This  insures  baggage  and  personal 


SPECIAL    KINDS   OF   INSURANCE    (siDE    LINES)        191 

effects  of  the  insured,  or  any  member  of  his  family,  or 
accompanying  servants,  wherever  the  property  may  be 
against  any  and  all  risks  and  perils  of  fire,  theft,  lightning, 
navigation  and  transportation  while  in  transit  by  or  in  the 
custody  of  any  railroad,  express,  transfer  or  transportation 
company,  or  steamship,  or  watercraf  t ;  against  loss  or  damage 
by  fire  and  lightning  while  in  any  building  except  in  the 
permanent  residence  of  the  insured,  or  in  storage,  or  theatre, 
or  other  places  of  public  amusement,  or  if  specifically  in- 
sured. Property  is  also  covered  against  loss  by  fire  while 
accompanying  the  insured  on  any  automobile  or  motorcycle, 
or  against  loss  caused  by  stranding,  sinking,  burning  or 
collision  of  a  yacht  on  which  the  insured  is  a  guest.  The 
loss  by  theft  is  limited  to  entire  trunks,  valises  or  other 
receptacles  of  travel,  from  rooms  occupied  by  insured  or 
when  checked  in  any  hotel,  boarding  house  or  railroad  ter- 
minal. It  does  not  cover  pilferage,  or  larceny,  or  theft  of 
jewelry  nor  of  hand  baggage  while  in  the  custody  of  the 
insured.     The  present  rate   (1922)   is  around  1%  per  $100. 

T.  B.  Broad  or  Pilferage  Cover.  This  form  is  a  very  much 
broader  cover  and  includes  theft,  pilferage  and  larceny, 
except  of  automobile  accessories,  also  jewelry  subject  to 
agreed  limitations.  Because  of  the  broader  undertaking  it 
covers  only  in  the  United  States,  Canada  and  Great  Britain, 
but  may  be  extended  by  endorsement  to  cover  other  countries 
or  world  wide.  The  present  rate  (1922)  up  to  $2,500  is 
around  2^/2%  per  $100  and  a  less  rate  for  additional  in- 
surance beyond  $2,500. 

Comparatively  few  people  know  of  this  convenient  form 
of  floating  insurance,  or  that  it  will  cover  not  only  the  head 
of  the  family  but  also  all  other  members  and  their  servants 
while  accompanying  them.  All  people  who  travel,  or  have 
automobiles,  or  belong  to  clubs,  or  act  as  delegates,  are 
prospective  purchasers. 

Transportation  Insurance.  The  demand  for  transporta- 
tion insurance  is  increasing  for  a  variety  of  reasons,  being 
stimulated  particularly  by  the  adoption  of  the  motor  truck 
as  an  auxiliary  means  of  transporting  goods. 

The  liability  of  common  carriers  is  limited,  whether  rail- 
road, express  companies  or  trucking  concerns,  and  frequently 
there  is  no  liability  unless  carelessness  or  negligence  can  be 
shown.  In  the  case  of  trucking  companies  frequently  there 
is  little  or  no  financial  responsibility  and  the  shipper  often 


192  THE  AGENTS   KEY   TO   FIRE   INSURANCE 

finds  it  impossible  for  this  reason  to  collect  any  amount 
due  him  for  a  loss.  Experience  has  shown  that  settlement 
from  railroad  and  express  companies  may  be  secured  only 
after  very  considerable  delays.  All  of  these  conditions  are 
factors  in  creating  a  demand  for  this  special  form  of  insur- 
ance furnished  by  stock  fire  insurance  companies. 

Transportation  insurance  is  divided  into  two  general 
groups,  the  *Hrip  transit"  policy  and  the  '' transportation 
floater"  policy,  either  of  which  is  available  whether  ship- 
ments are  made  by  rail  or  by  truck. 

The  trip  transit  form  of  policy  is  intended  to  cover  a 
single  shipment  of  goods,  while  in  transit  from  one  point  to 
another  by  rail  or  truck,  against  the  hazards  of  fire,  lightning, 
stranding,  sinking,  collision,  derailment  and  upset,  but  not 
against  loss  .by  breakage,  scratching,  marring,  or  other  similar 
damage,  unless  caused  by  fire,  collision,  derailment  or  upset. 
The  rates  for  this  class  of  insurance  are  based  on  the  dis- 
tance the  shipment  is  going;  also,  if  made  by  rail,  on  the 
form  of  bill  of  lading  used  and,  if  made  by  truck,  on  its 
capacity  and  the  nature  of  the  goods  shipped.  For  short 
distances  the  rates  begin  at  5c.  per  $100  for  shipment  by 
rail  and  10c.  per  $100  for  shipment  by  truck.  The  100% 
Coinsurance  Clause  is  attached  to  policy. 

Under  the  transportation  floater  form  of  policy  the  goods 
are  insured  while  in  the  hands  of  common  carriers,  including 
licensed  public  truckmen,  or  the  policy  may  cover  goods 
while  on  owners'  trucks.  The  hazards  insured  against  are 
fire,  lightning,  cyclone,  tornado,  flood  (meaning  rising 
waters),  collision,  upset,  derailment  and  all  risks  and  perils 
of  transportation  (except  as  provided),  during  the  time  the 
property  insured  is  in  transit  by  or  in  custody  of  railroad, 
express,  or  licensed  public  truckman,  while  on  land,  and 
against  marine  perils  while  on  ferries  and/or  cars,  on  trans- 
fer in  connection  therewith;  also  while  the  property  insured 
is  on  docks  or  in  depots  and/or  platforms  in  custody  of 
railroad,  express  or  licensed  public  truckman,  incidental  to 
transportation.  The  coming  together  of  railroad  cars  during 
coupling  is  not  considered  a  collision  nor  is  the  insurance 
liable  for  loss  by  breakage,  scratching,  marring,  or  other 
similar  damage,  unless  caused  by  fire,  collision,  derailment  or 
upset. 

Rates  depend  on  the  nature  of  the  merchandise,  form  of 
bill  of  lading  used,  method  of  shipment,  territory  covered, 
and  if  by  truck,  its  tonnage.    They  range  from  21/2%  to  3% 


SPECIAL    KINDS    OF    INSURANCE    (siDE    LINES)         193 

on  classes  of  goods  not  easily  susceptible  to  loss  by  col- 
lision or  upset  and  as  high  as  5%  for  those  more  damage- 
able. 

Various  forms  of  policies  are  issued.  Sometimes  policies 
are  written  for  an  amount  representing  the  estimated  total 
value  of  the  insured's  annual  shipments,  then  at  the  end  of 
the  policy  year  the  insured  furnishes  a  verified  statement 
showing  the  actual  total  value  of  all  shipments;  if  this  is 
greater  than  the  amount  for  which  the  policy  is  written, 
an  additional  premium  is  paid,  if  less,  a  rebate  is  allowed. 
In  other  cases  an  open  policy  is  issued  under  which  individual 
shipments  are  declared  and  paid  for  on  an  agreed  basis. 

The  chief  customers  for  this  form  of  insurance  are  manu- 
facturers, wholesalers  and  jobbers;  also  truckmen  and  ware- 
housemen, who  usually  take  out  policies  covering  their  legal 
liability  as  common  carriers  under  a  form  of  policy  reading : 
'  *  On  lawful  goods  and/or  merchandise  owned  by  the  insured 
or  for  which  he  may  be  legally  liable  as  carrier,  consisting 

principally  of 

while  loaded  for  shipment  on  or  in  transit  in  or  on  the 
following  described  motor  trucks  and/or  trailers  owned  and 
operated  by  the  insured." 

Water  Damage  Insurance. — This  is  one  of  the  modern 
kinds  of  indemnity  and  insures  against  loss  or  damage  caused 
by  leakage  of  water  to  ceilings,  walls,  floors,  and  decora- 
tions of  buildings,  stocks  of  goods  in  stores  and  warehouses, 
delicate  machinery,  furnishings,  etc. 

A  special  form  of  policy  is  issued  which  in  terms  covers 
loss  or  damage  caused  by  accidental  discharge,  leakage  or 
precipitation  of  water  or  steam   from  such   one  or  all  of 
the  following  sources  as  may  be  specified : 
Plumbing  system. 

Plumbing   tanks    (for  the  storage  of   water  for   the 
supply  of  the  plumbing  system). 

Steam  or  hot  water  heating  pipes  and  radiators. 
Elevator  tanks  and  cylinders. 
Standpipes  for  fire  hose. 
Roofs,  leaders  and  spouting. 

Rain  or  snow  driven  or  admitted  through  broken  or 
open  windows  and  skylights. 

The  cost  of  repairing  or  replacing  broken  piping  or 
apparatus  causing  the  loss  is  not  covered,  neither  is  discharge 
from    automatic    sprinkler   system,   but    the    latter   may    be 


194  THE   AGENTS    KEY    TO    FIRE    INSURANCE 

insured  separate!}'  under  a  Sprinkler  Leakage  Policy.  Policies 
are  customarily  issued  with  not  less  than  a  10%  Coinsurance 
Clause,  there  being  marked  credits  in  rate  as  insurance  to 
value  increases. 

The  causes  of  water  damage  losses  are  numerous  and 
practically  unpreventable.  Among  them  are:  Faucets  left 
open  by  children,  servants  or  careless  employees;  leakage, 
overflow,  bursting  or  fall  of  plumbing  supply  tanks ;  defective 
joints  or  leaky  radiators  in  steam  and  hot  water  systems 
due  to  rust  or  freezing;  standpipe  connections  broken  or 
accidentally  opened.  Rain,  snow  or  frost  from  windows 
or  skylights  left  open  either  carelessly  or  at  night  for  air 
may  cause  great  damage.  Water  damage  from  leaky  roof 
or  through  spouts,  leaders  or  gutters  is  especially  important 
in  mercantile  and  warehouse  buildings  where  roof  drains 
are  located  inside  the  building. 

Tenants  are  exposed  to  damage  by  the  carelessness  of 
others  in  the  same  building;  there  is  a  growing  demand  for 
tenant's  legal  liability  policies  in  cases  where  under  the 
lease  a  loss  due  to  carelessness  is  collectible  from  the  tenant 
causing  it  rather  than  from  the  landlord. 

The  field  for  the  sale  of  this  kind  of  indemnity  is  almost 
unlimited  and  is  largely  undeveloped. 


PART      TWO 

CHAPTER  XVI 

FORMS,  PRIVILEGES  AND  CLAUSES 
(Sixteen  Divisions) 


INTRODUCTORY     NOTE 

(1922    Edition) 

The  forms  given  herein,  some  chosen  from  the  many 
thousands  in  use,  and  others  especially  written  for  this  pub- 
lication, are  intended  to  illustrate  those  which  may  be  em- 
ployed for  insuring  all  the  usual  classes  of  property,  and  it 
is  believed  that  none,  appropriately  used,  will  prove  un- 
acceptable to  general  writing  companies  where  permitted  by 
local  rules.  The  currently  used  forms  for  most  sections 
of  the  United  States  will  be  found  in  each  division. 

In  those  territories  where  certain  prescribed  forms  and 
clauses  are  the  only  ones  which  are  permitted,  some  of  these 
forms  may  not  be  used,  but  one  of  the  objects  of  printing 
so  many  different  kinds  is  to  inform  the  reader  as  to  the 
phraseology  used  in  the  different  sections  of  the  country, 
for  such  helpful  suggestions  as  their  perusal  will  give.  Care 
should  be  exercised  in  not  attempting  to  use  a  form  that 
local  rules  will  not  permit. 

The  simplest  forms  are  the  ones  recommended ;  many  might 
have  less  verbiage  yet  furnish  equal  or  broader  cover,  but 
would  probably  not  meet  the  general  desire,  for  the  majority 
prefer  more  or  less  extended  descriptions,  even  though  realiz- 
ing that  this  tends  to  narrow  the  cover.  It  may  be  said,  how- 
ever, that  the  simpler  forms  are  gaining  in  popular  favor, 
both  with  agents  and  brokers  and  the  general  public. 

It  will  be  noted  that  the  clauses  and  conditions  given  are 
mostly  permissive  in  character  rather  than  restrictive ;  the 
latter  differ  widely  in  the  various  jurisdictions,  and  no  at- 
tempt has  been  made  to  include  them  for  fear  that  would  be 
confusing  rather  than  helpful;  besides,  the  restrictive  clauses 
will  be  required,  whether  or  no,  while  the  use  of  permissive 
clauses  rests  in  large  measure  with  the  agent  or  broker. 

THE  AUTHOR. 


PUBLISHER'S  NOTE 

While  this  book  is  copyrighted  as  a  whole,  all  policy  forms, 
privileges  and  clauses  contained  herein  are  hereby  released 
from  copyright,  and  permission  is  given  for  their  free  usa 

THE  SPECTATOR  COMPANY. 


DIVISION  I 

WRITING  FORMS 

General  Remarks — Title  and  Interest — Separation 
OF  Building  and  Contents — Building — Machinery 
— Furniture  and  Fixtures — Stock — Blanket  Poli- 
cies— Non-concurrency — Valued  Policies. 

The  ideal  fire  insurance  form  should  be  clear,  concise  and 
complete,  leaving  nothing  to  the  imagination  and  containing 

no  language  capable  of  more  than  one  interpre- 
Ideal  tation.     In  general  the  simpler  the  form,  the 

Forms  broader  the  cover;  enumeration  and  wealth  of 

detail  in  any  description  of  property  tends  to 
restrict  rather  than  widen  the  application  of  the  policy. 

It  has  been  so  much  the  habit  to  give  extended  details  of 
property,  that  the  very  simple  forms  with  no  unnecessary 

verbiage  are  not  those  most  in  use,  and  this 
Details  may  be  due  in  part  to  the  thought  that  a  long 

form  full  of  descriptive  language  will  seem 
more  impressive  to  the  insured,  and  carry  to  him  the  idea 
that  he  is  more  securely  and  more  liberally  covered  than  by  a 
form  so  short  and  simple  as  to  seem  elementary. 

In  the  forms  included  herein  it  is  sought  to  give  illustration 
of  both  the  simple  and  extended  phraseology  so  that  both  may 
be  available  if  desired.  The  language  em- 
Local  ployed  may  in  certain  cases  run  counter  to  the 
Rules  rules  of  various  associations  having  jurisdic- 
tion over  such  matters,  for  the  business  has 
not  yet  reached  a  condition  of  uniformity;  this  will  certainly 
prove  true  as  to  clauses,  and  care  must  be  exercised  to  substi- 
tute the  particular  clause  in  use  in  any  given  territory  for  the 
similar  clause  which  may  be  quoted. 

There  are  a  few  general  rules  for  policy  writing  and  form 
drawing  that  need  to  be  borne  in  mind,  and  these  may  be 
briefly  rehearsed.     (Please  read  Introductory  Note.) 

The  Title  and  Interest.  It  is  a  general  rule  that  either  the 
title  or  the  form  of  the  policy  must  disclose  the  interest  of 
the  insured,  or  must  in  some  way  put  the  company  on  notice  if 

197 


198  THE  AGENTS   KEY   TO   FIRE   INSURANCE 

the  interest  be  other  than  sole  and  unconditional  ownership. 
If  the  title  reads,  **John  Doe,  as  interest  may  appear,"  that 
is  sufficient  to  cover  his  interest  as  owner,  mortgagee,  lienor, 
contractor,  etc.;  or  if  the  title  reads,  John  Doe,  **0n  his  in- 
terest in,  etc.,"  that  is  sufficient  to  cover  any  interest:  But 
if  the  title  reads  John  Doe  and  the  form  reads  '*0n  building, 
etc.,"  with  no  explanatory  language  or  clause,  then  the 
insurance  will  not  be  valid  unless  John  Doe  is  the  sole  and 
unconditional  owner. 

Separation  of  Building  and  Contents.  It  is  the  general  rule 
that  a  building  must  be  insured  in  a  separate  item  from  con- 
tents, or  come  under  the  rule  governing  blanket  policies.  The 
various  rating  organizations  all  agree  on  this  general  rule, 
though  their  requirements  differ  regarding  any  further  sep- 
aration, and  vary  with  the  different  classes  of  risks. 

It  is  the  general  custom  to  insure  a  dwelling  in  one  item  and 
all  contents  thereof  in  another;  the  same  is  true  of  private 
jf     . ,  barns  and  contents,  except  that  some  organiza- 

ProDPrtv^         tions  require  a  separate  item  or  items  on  live 
^      ^  stock,  and  in  the  case  of  farm  property  a  still 

further  separation. 

Insurance  on  mercantile  property  is  usually 
Mercantile        separated  into  three  items:     One  on  building 
and  permanent  fixtures,  another  on  store  furni- 
ture and  fixtures,  and  another  on  stock. 

Insurance  on  manufacturing  risks  usually  covers  sepa- 
rately: The  building  and  fixtures  pertaining  to  its  service; 
„  the  machinery  and  appurtenances;   the  stock 

»    ,     .  and  materials  for  manufacturing.     Sometimes 

acturmg  ^  separate  item  covers  boilers  and  engines, 
and  another  item  on  patterns,  though  the  latter  are  usually  in- 
cluded with  the  machinery  and  a  limit  clause  is  attached 
reading  as  follows  or  similarly:  ''Not  more  than  10%  (or 
15%)  of  this  item  shall  cover  on  patterns." 

The  rules  of  rating  associations  governing  the  separation  of 

subjects  of  insurance  into  specific  items  are  so 

Local  varied  that  any  further  illustration  might  lead 

Rules  to  confusion;  the  rules  applying  in  any  given 

territory  should  be  referred  to  when  preparing 

forms  to  cover  property  located  therein. 

Building.  Under  the  building  item  it  is  customary  to  in- 
clude with  the  structure  what  are  termed  permanent  fixtures. 


WRITING   FORMS  199 

Except  where  otherwise  provided  by  underwriting  rules,  these 
fixtures  include  the  boilers,  engines,  elevators  and  apparatus 
for  heating,  lighting  and  ventilating;  water  pipes  and  other 
fixtures  pertaining  to  the  service  of  the  building  for  the  pur- 
pose for  which  it  is  intended,  for  these  are  considered  as  part 
and  parcel  of  a  complete  building. 

Machinery.  Under  this  item  it  is  customary  to  cover  all 
the  machinery,  together  with  tools,  apparatus  and  supplies 
for  use  in  connection  therewith,  except  such  as  are  covered 
under  the  building  item.  The  machinery  item  is  usually  so 
worded  as  to  include  office  furniture  and  fixtures.  Care 
should  be  taken  not  to  enumerate  those  things  that  are  cov- 
ered Avith  the  building,  for  confusion  ensues  when  a  loss 
occurs  and  it  is  found  that  two  or  more  items  of  the  form 
cover  on  identical  property. 

Furniture  and  Fixtures.  In  a  mercantile  or  non-manufac- 
turing risk  it  is  customary  to  cover  under  this  item  all  the 
furniture  and  fixtures,  tools  and  apparatus  not  covered  under 
the  building  item. 

Stock.  Under  this  item  all  stock  is  covered,  including 
boxes,  cartons,  labels  and  supplies  for  use  in  connection  there- 
with. As  a  rule,  household  furniture  or  wearing  apparel  in 
use  may  not  be  included  in  an  item  on  stock. 

Note: — It  is  desirable  to  cover  in  the  building  item  what- 
ever machinery  or  fixtures  may  be  included  under  local  under- 
writing rules,  for  the  building  usually  bears  a  lower  rate  than 
contents. 

Blanket  Policies.  A  policy  is  termed  ^* blanket,  ^^  or  to  have 
a  ** blanket  form,"  when  it  covers  under  one  item  property 
that  is  usually  covered  under  two  or  more  separate  items: 
For  example,  dwelling  and  household  furniture ;  building,  ma- 
chinery and  stock,  'or  furniture  and  fixtures  with  stock ;  also, 
when  property  in  two  or  more  locations,  that  are  considered 
to  be  separate  fire  risks,  is  covered  under  one  item. 

Blanket  policies  are  usually  required  to  have  as  a  part  of 
the  contract,  the  90%  or  100%  Coinsurance  Clause,  or  the 
80%  Coinsurance  Clause  coupled  with  the  Distribution 
Clause,  or  perhaps  the  Distribution  Clause  alone. 

IK    Usually  only  manufacturing  or  large  mercantile  establish- 
Hients  are  insured  under  blanket  policies. 
1 


200                 THE  AGENTS   KEY  TO   FIRE  INSURANCE  1 

Hon-Concurrence.     One  of  the  most  important  things  in  ] 

writing  and  placing  insurance  is  to  make  certain  that  all  ' 

policies  covering  identical  property  in  whole  or  i 

Importance      in  part  shall  be  concurrent.    This  does  not  mean  ; 

that  the  forms  must  necessarily  be  identical,  i 

word  for  word,  but  it  does  mean  that  in  effect  and  applica-  ' 

tion  their  terms  and  conditions  must  be  the  same  so  far  as  • 

they  affect  liability  for  loss  or  the  apportion-  ; 

Familiar          ment  of  loss.    The  most  frequent  form  of  non-  i 

Types                concurrence    is    where    some    policies    cover  j 

specifically   and   other   policies   cover   blanket  i 

over  two  or  more  separate  properties.    To  illustrate:  i 

If  policy  1  covers  $4,000  on  building  A,  i 

policy  2  covers    5,000  on  building  B,    and  \ 

policy  3  covers     3,000  on  both  A  and  B,  ' 

such  insurance  is  non-concurrent  and  would  be  still  further  ; 

complicated  if  the  coinsurance  clause  were  attached  to  the  ; 

policies.     Other  familiar  forms   of  non-concurrence   are: —  I 

Where  some  policies  bear  the  coinsurance  clause  and  others  | 

do  not,  or  where  they  are  in  (iifferent  percentages;  where  i 

some  cover  in  building  and  others  in  building  and  yard  ad-  | 

jacent;  where  some  cover  building  and  additions  while  others  j 

cover  building  only.     One  famous  case  is  where  two  build-  | 

ings  were  separately  insured  in  different  companies  and  each  \ 

form  read,  **  building  and  additions  or  extensions  adjoining  \ 

or  communicating.''     They  were  situated  on  two  different  j 

streets  and  came  nearly  together  in  the  rear  in  the  form  of  a  I 

right  angle.    In  this  angle  there  was  a  structure  which  ad-  [ 

joined  both  buildings  and  communicated  with  each  and  this  ■ 

contained  an  elevator  that  served  both  in  common.    This  ele-  , 

vator  structure  was  erected  jointly  by  the  owners  of  both  j 

buildings  on  land  belonging  part  to  one  and  part  to  the  other.  < 

The  fire  destroyed  this  structure  and  damaged  each  adjoining  ! 

building.     The  question  arose  which  set  of  policies  should  ; 

pay  the  loss  to  the  elevator  structure  and  if  both  should  pay  j 

then  in  what  proportion.  i 

) 

There  are  certain  forms  of  non-concurrence  that  are  not  i 

substantial,  for  example,  one  policy  on  stock  may  describe  it  i 

in  great  detail,  another  may  read  simply,  **on  ', 
Less  stock  of  merchandise,"  but  both  would  pre- 
Important  sumably  pay  any  loss  that  either  would  pay. 
Kinds  A  privilege  may  be  worded  in  many  different 
ways  under  different  policies  but  so  long  as  the 
things  granted  are  the  same  the  non-concurrence  of  phrase- 


J 


WRITING   FORMS  201 

ology  is  not  substantial.  These,  however,  are  excuses  rather 
than  reasons  for  not  having  all  policies  read  exactly  alike, 
word  for  word,  which  is  much  the  better  and  safer  way. 

The  importance  of  concurrent  insurance  can  hardly  be  over- 
stated, and  in  examining  policy  forms  the  test  to  be  applied 
is  this : — Do  these  policies  attach  in  such  man- 
The  Test  ner  that  any  loss  which  happens  will  be  cov- 

ered   without    question    arising    as    to    which 

policies  or  items  will  pay  same  or  in  what  proportion? 

* 

Valued  Policies.  In  some  states  there  is  a  statute  in  force, 
commonly   called   the  valued  policy   law,   under  which   the 

amount  of  insurance  covering  a  building  and  in 
Definition         force  at  the  time  of  fire  is  considered  to  be  the 

value  of  such  building,  regardless  of  what  its 
real  value  may  be ;  and  if  the  building  is  so  far  destroyed  by 
fire  that  it  cannot  be  repaired,  then  the  insurance  must  be 
paid  in  full,  regardless  of  whether  such  insurance  is  in  ex- 
cess of  the  real  loss  or  not.  In  one  or  two  states  this  law  is 
also  extended  to  include  certain  classes  of  personal  property. 

Some  authorities  hold  that  a  valued  policy  merely  fixes  the 
value  of  the  property  covered  as  at  the  inception  of  the 

policy,  and  that  if  it  has  depreciated  in  value 
Modification    the  insurance  cannot  be  held  liable  for  more 

than  the  stated  value  less  depreciation.  An  il- 
lustration of  this  view  is  made  as  follows:  Assume  that  a 
valued  policy  for  $5,000  has  been  placed  on  a  building,  and 
that  subsequently  a  tornado  carries  off  the  roof  which  will 
cost  $1,000  to  replace.  Some  time  later,  no  repairs  having 
been  made,  the  remainder  of  the  building  is  destroyed  by  fire. 
In  such  case  it  is  not  believed  that  the  courts  would  require 
payment  of  the  face  of  the  policy  if  it  were  conceded  that 
the  original  value  of  the  building  was  not  more  than  $5,000. 
This  being  true,  it  is  argued,  would  not  the  insurance  be  en- 
titled to  any  depreciation  in  value  that  could  be  shown  to  have 
taken  place  subsequent  to  the  issuance  of  the  policy. 

For  this  reason  it  is  held  by  these  authorities  that  the  in- 
sured should  not  rely,  under  any  and  all  circumstances,  on  a 
recovery  of  the  face  of  a  valued  policy. 


202  THE  AGENTS   KEY   TO   FIRE   INSURANCE  ; 

The  valued  policy  law  is  generally  held  by  thoughtful  and  ^ 

observant  minds  to  be  pernicious,  subversive  of  economic  law  \ 

and  the  principle  of  indemnity  upon  which  fire  ; 

Pernicious;      insurance  is  based;   to   be  wrong  in   theory,  i 

Uneconoiuic     harmful  in  practice  and  a  direct  incentive  to  \ 

fraud.    Where  such  a  law  exists,  especial  care  j 

needs  to  be  exercised  in  fixing  the  amount  of  insurance  to  be  ; 

carried.    The  rules  to  be  observed  in  issuing  policies  covering  ; 

buildings,  or  other  property  if  affected,  differ  in  the  various  ; 

states  where  such  a  law  is  in  force,  but  there  is  one  rule  that  | 

is  universal,  namely,  not  to  write  nor  permit  more  insurance  ^ 

than  the  actual  cash  market  value  of  the  property' covered.  | 

Sometimes,  in  writing  policies  on  buildings,  the  total  insur-  '\ 

ance  permitted  is  limited  in  the  policy  under  the  following  ; 

or  similar  wording:  1 

"The  insurable  value  of  the  building  described  herein  ■ 

is  fixed   at  $ ,  and   total   concurrent   insurance  | 

thereon,  including  this  policy,  is  hereby  permitted  to  that 

amount  only.''  ! 

While  the  valued  policy  law  is  a  vicious  one  as  applied 
indiscriminately  to  buildings,  the  value  of  which  may  be  de- 
termined with  fair  accuracy  and  does  not  vary 
Applied  to        greatly  from  time  to  time,  it  is  doubly  so  when 

Personalty       applied  generally  to  personal  property,  where  i 

values  are  constantly  changing  and  cannot  in 
the  nature  of  things  be  kept  track  of.  Nevertheless,  there 
are  certain  classes  of  personal  property  whose  values  fluctuate 
little,  if  any,  which  it  is  quite  customary  to  insure  under  a 

valued  form  of  policy,  for  the  reason,  that,  because  of  their  | 

peculiar  character,  it  has  been  found  to  work  out  more  satis-  ; 

factorily  in  practice  to  agree  on  the  value  beforehand,  rather  | 

than  to  leave  this  for  determination  after  loss  has  occurred  j 

and  the  property  covered  has  been  destroyed.    Within  these  j 

classes  are  embraced  pictures,  paintings,  etchings,  statuary  i 

and  other  works  of  art;  curios,  antiques,  rare  stamps,  nega-  ' 

tives,  specimens  and  documents,  and  in  some  cases  violins,  ' 

cellos  and  other  musical  instruments;  valuable  horses,  cattle  | 

or  other  live  stock;  collections,  or  other  property  of  unusual  j 

value.    As  a  rule,  valued  policies  on  personal  property  are  not  i 

written  until  submitted  to  and  approved  by  the  company;  : 

many  companies  decline  them  altogether.  \ 

The  forms  in  use  for  insuring  personal  property  with  the  j 

value  fixed  may  be  illustrated  in  a  general  way  by  the  follow-  j 

ing  two  forms :  \ 


WRITING   FORMS  203 

VALUED  FORM  NO.  1. 

$....0n  paintings,  including  frames  and/or  shadow  boxes,  as 
per  schedule  following  herewith,  while  contained  in  the  two  and 
one-half  story  frame  slate  roof  dwelling,  situate  No.  100  Elysian 
Field,  Tarrytown,  New  York. 

It  is  understood  and  agreed  that  the  amount  stated  opposite  the 
name  of  each  picture  shall,  for  the  purposes  of  this  insurance,  be 
considered  the  value  thereof. 

$ Portrait  of  Mrs.  John  Doe  by  Sir  Joshua  Reynolds. 

$ Arabian  War  Scene,  by  Fortuny. 

$ On    oil    painting;    "Vanity";    young   girl    in    rose    colored 

empire  gown  standing  before  a  mirror;  by  Walter  McEwen. 

VALUED  FORM  NO.  2. 

On  the  following  described  property  while  contained  in  the 
three-story  frame  shingle  roof  dwelling,  situate 

$ On  antique  Chinese  screen  of  7  folds,  portraying  an  elope- 
ment and  attributed  to  the  Eighteenth  Century  period,  valued  at 


$ On   United   States   Silver   Dollar  coined  in   the  year   1814, 

valued  at  $ 

$....0n  a  six-foot  mahogany  side  board,  Chippendale  pattern, 
valued  at  $ 

It  should  be  borne  in  mind  that  the  phrase,  '*  Valued  at 

$ /'  or  other  similar  language,  definitely  establishes 

the  value  of  the  property  so  described,  and  all  that  is  incum- 
bent on  the  insured  to  sustain  a  claim  in  respect  of  value  is 
to  prove  that  property  destroyed  by  fire  is  actually  the  identi- 
cal property  described  and  valued  in  the  policy. 

Where  a  limit  of  value  is  to  be  fixed  the  phrase,  '^Valued 

at  $ "  should  not  be  used,  but  instead  *'not  exceeding 

$ to  apply  on  any  one ,"  or  in  some  cases 

'*  value  limited  to  not  exceeding  $ "  may  be  used. 


I 


DIVISION  II 

SPECIAL  AGREEMENTS 

General  Remarks — General  Privileges  and  Condi- 
tions —  Other  Insurance  —  Lightning  Clause — 
Dynamo  Clause — Kerosene  Oil  Stoves — Heirs  and 
Assigns — Work  and  Materials — Noon — Founda- 
tions— Leased  Land — Divisible  Contract — Bonds 
and  Mortgages — Foreclosure — Act  or  Neglect — 
Contract  of  Sale — Commission  (in  Trust)  Clauses 
—  Guests  and  Servants  Clause  —  Exclusion 
Clauses — Miscellaneous  Clauses. 

In  addition  to  drawing  a  form  that  shows  the  interest  cor- 
rectly, that  properly  describes  and  locates  the  property  in- 
tended to  be  covered,  and  that  is  free  from  non-concurrency, 
care  should  be  exercised  that  permission  be  given  for  any 
violation  of  the  policy  conditions  of  which  the  agent  has 
knowledge  at  the  time  of  issuing  the  policy,  in  so  far  as 
they  are  present  in  his  mind. 

It  is  not  customarily  held  to  be  the  duty  of  the  agent  to 
interrogate  the  insured  regarding  all  possible  violations  of 
the  policy  conditions  one  by  one,  but  ordinary 
Interrogation  care  in  drawing  the  contract  will  lead  him* to 
Not  Required  include  therein  the  permits  that  are  customarily 
granted  when  insuring  all  classes  of  property, 
and,  also,  the  special  permits  usually  applicable  to  given 
classes  of  risks.  For  example,  practically  all  risks  are  lighted 
artificially,  therefore,  proper  permit  should  be  given  when 
lighting  is  by  some  system  that  requires  permission,  such  as 
by  electricity,  or  by  gasoline,  acetylene  or  Blau  Gas  systems. 
Again,  printers  commonly  clean  type  with  benzine  or  gasoline, 
therefore,  proper  permit  should  be  attached  covering  that 
feature  when  insuring  printers. 

The  wise  and  prudent  agent  will  always  ask  the  insured  to 
read  over  the  policy,  including  both  the  written  and  the 
J     .J,,  printed  portions,  in  order  that  the  policy  when 

^,,.     ..  issued  may  contain  all  the  provisions  neces- 

^^    ^  ^        sary  to  make  it  a  valid  contract  according  to 
conditions  as  they  exist  at  its  inception. 

201 


SPECIAL   AGREEMENTS  205 

GENERAL  PRIVILEGES  AND  CONDITIONS 

There  are  certain  general  privileges  granted  or  conditions 
incorporated  in  insurance  policies  that  are  applicable  under 
certain  circumstances  when  covering  any  and  all  classes  of 
property.  Some  of  these  are  as  follows,  though  the  wording 
of  such  clauses  may  differ  in  the  different  parts  of  the 
country : 

(1)  "Other  Insurance  Permitted  Without  Notice  Until  Re- 
quired." This  is  commonly  used  on  all  forms  (except  where 
it  is  not  intended  to  permit  it),  and  is  essential  to  the  safety 
of  the  contract,  since  otherwise  the  existence  of  other  insur- 
ance would  void  the  policy.  Sometimes  this  permit  is  made 
to  read,  "Privilege  granted  for  other  insurance,"  ^* Other 
concurrent  insurance  permitted,"  or  ** Other  concurrent  in- 
surance permitted  to  the  extent  of  $ only. ' ' 

(2)  Lightning  Clause.  The  lightning  clause  is  usually  at- 
tached to  all  policies  of  fire  insurance.  The  New  York  Stand- 
ard clause  reads  as  follows: 

^^This  policy  shall  cover  any  direct  loss  or  damage 
caused  by  Lightning  (meaning  thereby  the  commonly 
accepted  use  of  the  term  Lightning,  and  in  no  case  to 
include  loss  or  damage  by  cyclone,  tornado  or  wind- 
storm), not  exceeding  the  sum  insured,  nor  the  interest 
of  the  insured  in  the  property,  and  subject  in  all  other 
respects  to  the  terms  and  conditions  of  this  policy;  pro- 
vided, however,  if  there  shall  be  any  other  insurance  on 
said  property  this  Company  shall  be  liable  only  pro 
rata  with  such  other  insurance  for  any  direct  loss  by 
Lightning,  whether  such  other  insurance  be  against  direct 
loss  by  Lightning  or  not." 

(3)  Dynamo  Clause.  When  electrical  machinery  and  sup- 
plies are  insured,  the  dynamo  clause  is  usually  required,  one 
form  of  which  reads  as  follows: 

**If  dynamos,  exciters,  lamps,  motors,  switches,  or 
other  electrical  appliances  or  devices  are  covered  under 
this  policy,  this  company  shall  not  be  liable  for  any 
electrical  injury  or  disturbance,  whether  from  artificial 
or  natural  causes,  unless  fire  ensues,  and  then  for  the 
loss  by  fire  only." 

(4)  "Privilege  Granted  for  Kerosene  Oil  Stoves  for  Heat- 
ing and  Cooking."  The  policy  permits  the  use  of  kerosene  oil 
for  light  but  makes  no  mention  of  stoves,  hence,  this  privilege 
is  advisable  on  all  policies  where  stoves  are  likely  to  be  used. 


206  THE  AGENTS  KEY  TO  FIRE  INSURANCE 

(5)  "In  the  event  of  the  death  of  the  insured  this  policy 
shall  continue  in  force  for  the  benefit  of  the  heirs,  adminis- 
trators or  assigns  as  interest  may  appear." 

"The  use  of  this  provision  probably  arose  prior  to 
the  use  of  the  present  standard  policies  because  under 
the  old  forms  there  was  some  doubt  whether  the  policy 
covered  the  insured's  property  passing  to  others  upon 
his  death.  The  present  policy  provisions  render  this 
language  unnecessary. ' ' 

(6)  Work  and  Materials  Clause.  This  clause  is  worded  in 
a  number  of  ways,  the  following  being  an  example : 

"Permission  granted  to  do  such  work  and  to  keep  and 
use   such   materials   as   are   usual   in   the   business   of 
(specifying  the  business).'' 
Sometimes  the  following  is  added  to  the  clause: 

**but  the  use,  handling  or  storage  of  benzine,  benzole, 
gasolene,  naphtha,  calcium  carbide,  fire-works,  nitro- 
glycerine, dynamite,  ether,  collodion,  lacquer  (or  "ba- 
nana liquid")  and  rubber  cement  is  prohibited  unless 
specific  permission  is  indorsed  hereon,  otherwise  this 
policy  to  be  null  and  void." 

•  The  printed  conditions  of  the  policy  provide  that  it  shall 
become  void  if  certain  specified  articles  are  kept,  used  or 
allowed  on  the  premises,  or  if  the  hazard  be  increased  within 
the  control  or  knowledge  of  the  insured.  The  clause  first 
quoted  is  intended  to  permit  the  use  of  any  articles  or  the 
doing  of  any  work,  if  "usual"  in  the  specified  business, 
whether  that  involves  increase  of  hazard  or  the  use  of  the  in- 
terdicted articles.  The  added  language  qualifies  this  only 
by  forbidding  the  use,  handling  or  storage  of  the  articles 
enumerated  therein. 

(7)  "Where  the  Word  'Noon'  is  used  Same  Shall  Be  Con- 
strued to  Mean  Standard  Time  at  the  Location  of  Property 
Involved."  The  Policy  specifies  that  liability  shall  begin  and 
end  *at  noon,'  and  this  clause  is  designed  to  avoid  confusion 
with  *Sun'  time  in  use  in  many  localities. 

(8)  "Foundations  of  Buildings  Below  the  Level  of  the 
Ground  and  Cost  of  Excavations  are  not  Covered  Hereunder." 

There  is  no  occasion  for  this  clause  except  where  coinsurance 
is  a  part  of  the  policy  contract.    Usually  little,  if  any,  damage 


SPECIAL  AGREEMENTS  207 

to  such  portions  of  a  building  result  from  fire  and  by  ex- 
cluding them  less  insurance  is  necessary. 

(9)  "It  is  Understood  and  Agreed  that  this  Policy  Shall 
Not  Be  Invalidated  If  Building  Stands  on  Leased  Land."  The 

policy  provides  that  if  the  building  stands  "on  ground  not 
owned  by  the  insured  in  fee  simple"  the  policy  is  void.  Hence, 
the  necessity  for  this  privilege  where  land  is  leased.  Ground 
rents  are  quite  customary  in  some  cities — practically  the  en- 
tire City  of  Salamanca,  New  York,  stands  on  land  leased  from 
the  Indians — and  such  leases  are  frequent  along  the  right-of- 
way  of  a  railroad,  or  near  piers  and  wharves.  Care  should 
be  exercised  in  each  case  where  building  is  insured  to  learn 
whether  the  land  on  which  it  stands  is  owned  or  leased. 

(10)  "It  Is  Understood  and  Agreed  That  This  Policy  Shall 
Be  Considered  a  Divisible  and  Severable  Contract,  As  If 
Separate  Policies  Were  Issued  on  Each  Building  and/or  Its 
Contents."  The  policy  by  its  terms  provides  that  a  breach  of 
condition  voids  the  entire  policy,  not  merely  the  one  item 
which  may  be  affected.  Thus,  vacancy  beyond  ten  days  of 
one  building  out  of  twenty  insured  would  render  void  the  en- 
tire policy.  This  does  not  seem  just  nor  the  true  intent  of 
the  contract  and  several  states  have  held  that  the  policy  is  a 
divisible  contract  in  spite  of  its  terms,  but  it  is  much  safer 
to  insert  the  condition  quoted  in  the  form  and  save  all  trouble, 
particularly  in  schedule  forms  covering  separate  and  distinct 
risks. 

(11)  "It  Is  Understood  and  Agreed  That  the  Existence  of 
Bonds  and/or  Mortgages  Covering  in  Whole  or  in  Part  the 
Property  Described  Herein  Shall  not  Invalidate  this  Insur- 
ance." Large  corporations  frequently  execute  a  mortgage  cov- 
ering their  entire  property,  both  real  and  personal,  as  se- 
curity for  a  bond  issue,  and  since  such  mortgage  would  be  in 
part  a  chattel  mortgage,  this  clause  is  desirable  on  all  policies 
issued  to  corporations.  Sometimes  such  policies  are  made 
payable  to  trustees  for  bondholders  and  in  such  case  there 
is  usually  no  objection  to  the  attachment  of  a  mortgagee 
clause. 

(12)  "Consent  Is  Hereby  Griven  for  Foreclosure  Proceed- 
ings to  Be  Commenced  on  the  Within  Described  Property  or 
Notice  Given  of  Sale  Thereof  by  Virtue  of  Mortgage  or 
Trust  Deed."  This  condition  is  usually  permitted  in  the  form 
only  when  covering  property  in  the  larger  cities  and  should 


208  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

not  be  used  when  insuring  outlying  or  country  property,  ex- 
cept by  endorsement  in  case  of  necessity. 

(13)  "This  Insurance  Shall  Not  Be  Invalidated  by  the  Act 
or  Neglect  of  Any  Other  Occupant  of  the  Within  Described 
Premises,  Providing  Such  Act  or  Neglect  Is  Not  Within  the 
Knowledge  or  Control  of  This  Insured."  The  reason  for  at- 
taching this  condition  is  because  some  authorities  hold  that 
the  breach  of  condition  of  the  policy  by  any  tenant  of  a  build- 
ing affects  all  the  insurance  attaching  on  or  in  the  building. 

(14)  "The  Execution  of  Contracts  of  Sale  Shall  Not  Preju- 
dice This  Insurance. ' '  The  use  of  this  clause  is  generally  held 
to  protect  the  insured's  (vendor's)  interest  in  realty  under 
contract  of  sale,  even  though  the  vendee  is  let  into  posses- 
sion; but  it  does  not  extend  the  insurance  to  cover  the  ven- 
dee's interest. 

Another  form  is  sometimes  used,  which  is  self-explanatory : 

* '  Contracts  of  sale  may  be  entered  into  without  preju- 
dice to  this  insurance,  which  shall  continue  for  the  benefit 
of  vendor  and  vendee,  as  interest  may  appear,  until 
the  delivery  of  deed,  but  this  insurance  shall  not  attach  if 
other  insurance  (except  renewals  of  existing  policies)  has 
been  procured  subsequent  to  execution  of  contract  of 
sale."     (See  also  Contracts  of  Sale.) 

(15)  COMMISSION  (IN  TRUST)  CLAUSES 

Such  clauses  read  variously,  a  common  form  being  as 
follows : 

His  own  or  held  by  him  in  trust,  or  on  commission  or  con- 
signment, or  on  storage  or  for  repairs,  or  sold  but  not  re- 
moved, or  for  which  he  may  be  liable. 

This  clause  is  principally  used  on  forms  insuring  stock, 
although  it  is  also  used  somewhat  on  machinery  forms.    When 

introduced  it  was  evidently  intended  to  cover 
Where  the   insured's  interest  in — and  legal  liability 

Used  for — property  belonging  in  whole  or  in  part  to 

others,  but  it  has  been  given  a  very  much 
broader  meaning  by  the  courts.  Regardless  of  whether  the 
merchant,    the    manufacturer,    or    the    warehouseman    has 

assumed  responsibility  or  is  legally  liable  for 
Danger  property  of  others  that  is  on  his  premises,  or 

of  Use  has  agreed  to  cover  it  with  insurance,  the  courts 

have  held  that  the  language  quoted,  if  on  his 
policies  of  insurance,  gives  each  owner  of  such  property  the 


SPECIAL   AGREEMENTS  209 

right  after  a  fire  to  ratify  the  insurance  so  placed  and  make 
claim  thereunder  for  loss  or  damage  to  his  goods.  It  does  not 
matter  that  the  insured  did  not  contemplate  this,  nor  provide 

sufficient  insurance  to  cover  the  value  of  all  the 
Obligation  property  in  his  keeping  in  addition  to  his  own, 
of  Insured        nor  that  his  own  loss  alone  is  more  than  the 

amount  of  his  insurance,  nevertheless  it  has 
been  held  that  he  must  share  his  insurance  with  the  owners 
of  such  property  pro  rata. 

It  will  be  seen,  therefore,  that  this  clause,  while  intended 
to  be  beneficent  in  character,  may  work  to  the  serious  dis- 
advantage of  the  insured,  and  if  it  is  contained 
Rarely  in  his  policy  form  he  must  be  prepared,  in  order 

Beneficent        to   be   safe,   to   carry   insurance   sufficient   in 
amount  to  cover  adequately  the  value  of  all 
the  property  in  his  premises. 

There  are  many  cases  where  the  insured  has  an  interest  in 
property  in  which  others  also  have  an  interest;  for  instance, 
where  materials  have  been  sent  for  manufae- 
Necessity  ture  and  he  has  expended  labor  and  findings 

for  Cover  thereon.  Goods  are  often  held  on  commission 
or  otherwise  on  consignment  which  the  cus- 
todian has  agreed  to  keep  insured,  and  there  are  other  cases 
where  it  is  necessary  or  desirable  to  assume  liability  for  prop- 
erty of  others.  Hence,  it  becomes  necessary  to 
Proper  provide  insurance  which  will  give  the  proper 

Method  protection  without  being  open  to  the  objections 

set  forth  in  the  foregoing.  There  are  two  ways 
in  which  this  may  be  accomplished : 

I  First,  by  taking  out  separate  insurance,  either  by  a  separate 
policy  or  under  a  separate  item,  specifically  covering  prop- 
erty for  which  the  insured  is  legally  liable  and  excluding  his 
own  property  therefrom. 

Second,    by    substituting    for    the    customary    commission 
clause  one  reading  as  follows : 

*Hhe  property  of  the  insured;  and  on  the  interest  of 

the  insured  in  and/or  liability  for  similar  property  held 

by  the  insured,  whether  on  storage,  or  for  repairs,  or 

y       otherwise,  and  belonging  in  whole  or  in  part  to  others." 


210  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

Another  form  of  clause,  in  use  in  the  West,  reads : 

*'the  property  of  the  insured;  and,  providing  the  in- 
sured is  legally  liable  therefor,  this  item  shall  also  cover 
such  merchandise  held  in  trust,  or  on  commission,  or 
sold  but  not  delivered. '* 

Whenever  any  commission  clause  is  used  it  is  recommended 
that  a  clause  be  inserted  in  the  form  excluding  property  on 
which  there  is  specific  insurance.    (See  Exclusion  Clauses.) 

(16)  GUESTS  AND  SERVANTS  CLAUSE 

Such  clauses  read  in  various  ways,  the  common  form  being 
''belonging  to  the  insured  or  any  member  of  the  family, 
guests  or  servants. '^  An  extreme  form  of  the  clause  reads, 
*'The  property  of  the  insured  or  any  member  of  the  family 
or  household,  their  relatives,  friends,  guests,  and/or  ser- 
vants.'*  Such  clauses  are  used  on  household  furniture  forms 
evidently  with  the  thought  that  the  broader  cover  is  a  better 
contract  for  the  insured.    It  is,  however,  open  to  the  same 

objections  that  obtain  in  the  case  of  commis- 
Like  a  sion  clauses,  namely,  that  it  gives  to  guests  and 

Commission  others  the  right  to  a  portion  of  the  house- 
Clause  holder's  insurance  in  case  property  belonging 

to  them  while  in  his  house  is  damaged  by  fire. 
If  the  policy  is  made  to  cover  the  property  of  the  insured  and 
members  of  his  household,  it  would  undoubtedly  cover  that 
owned  by  himself,  wife,  children  and  relatives  living  with 
him.  It  can  hardly  be  disputed  that  it  would  also  cover  the 
property  of  servants,  for  they  are  in  fact  members  of  the 
household  or  family,  so  recognized  alike  in  law  and  custom. 

If  the  insured  wishes  to  assume  liability  for  the  property  of 
guests  and  others,  this  may  be  safely  done  by  taking  out  a 
separate   policy,   or  having   a   separate   item, 
Proper  specifically    covering    the   property   of   guests 

Method  separately  from  his  own.    It  is  seldom  that  the 

host  wishes  to  do  this  and  it  is  therefore  sug- 
gested that  the  safe  clause  to  put  on  a  household  furniture 
policy  is  one  reading  as  follows : 

''The  property  of  the  insured  or  any  member  of  his 
own  family  and  on  the  legal  liability  of  the  insured  for 
loss  or  damage  to  similar  property  of  others." 

Then,  if  the  host  assumes  the  liability  of  protecting  his 
guests  against  loss  by  fire,  this  clause  will  cover  their  prop- 
erty. 


SPECIAL   AGREEMENTS  211 

As  a  mean  between  the  two  extremes  the  following  clause 
has  been  adopted  for  use  in  the  West. 

'*Not  exceeding  ten  (10)  per  cent,  of  the  amount  of 
any  item  of  this  policy  on  personal  property  shall  cover 
also,  as  per  above  form,  property  of  guests,  and  servants, 
loss,  if  any,  to  be  adjusted  with  and  payable  to  the  in- 
sured named  in  this  policy.  *' 

(17)  EXCLUSION  CLAUSES 

(Property  specifically  insured.) 
There  are  many  forms  of  general  clauses  in  use  for  exclud- 
ing property  that  is  more  specifically  insured,  the  following 
being  examples: 

''This  policy  does  not  cover  property  specifically  in- 
sured. ' ' 

"This  policy  shall  not  be  held  to  cover  personal  prop- 
erty of  others  that  is  specifically  insured." 

''This  policy  does  not  cover  on  any  of  the  above  men- 
tioned property  that  is  the  subject  of  more  specific  in- 
surance." 

' '  Any  particular  machine  or  any  other  article  or  prop- 
erty above  described,  on  which  there  is  specific  insurance, 
shall  not  be  covered  by  this  policy." 

"This  policy  does  not  cover  the  assured 's  interest  in 
personal  property  in  which  parties  other  than  the  as- 
sured also  have  an  insurable  interest  when  the  assured 's 
interest  in  said  property  is  otherwise  specifically  in- 
sured. ' ' 

"The  following,  if  the  subject  of  more  specific  insur- 
ance, shall  not  be  covered  hereunder: 

Personal  property  belonging  exclusively  to  parties 
other  than  the  insured  specifically  named  herein ; 

The  insured's  interest  in  and/or  legal  liability  for  per- 
sonal property  in  which  others  also  have  an  insurable 
interest. ' ' 

"This  policy  shall  not  cover  personal  property  be- 
longing to  others,  nor  the  interest  of  the  insured  in 
and/or  liability  for  personal  property  belonging  in  whole 
or  in  part  to  others,  or  held  on  storage  or  for  repairs, 
when  such  property,  interest,  and/or  liability  is  the  sub- 
ject of  more  specific  insurance." 

Note. — The  two  last  clauses  should  not  be  used  unless 

e  commission  clause  is  a  part  of  the  contract. 


i 


212  THE  AGENTS   KEY  TO  FIRE   INSURANCE  I 

To  any  of  the  foregoing  or  other  exclusion  clauses  which- 
may  be  used,  the  following  provision  is  sometimes  added :         i 

''except  for  the  excess  of  value  over  such  specific  | 
insurance.  * ' 

The  object  in  attaching  a  clause  excluding  property  specifi-  i 
cally  insured  is  chiefly  to  prevent  the  general  insurance  from ! 

contributing  with  such  specific  insurance  in  the  | 
Object  payment  of  a  loss,  for  this  is  apt  to  work  to  j 

the  disadvantage  of  the  holder  of  the  general  i 
insurance,  and  all  the  evils,  pitfalls  and  vexations  of  non-  j 
concurrency  may  flow  therefrom.  j 

Some  of  the  rating  organizations  prescribe  the  exact  form  ' 
of  general  exclusion  clause  which  shall  be  used. 

MISCELLANEOUS  CLAUSES  ! 

I 

(18)  **It  is  understood  and  agreed  that  when  the  in-  ' 
sured  is  the  owner  of  the  building,  and  any  of  the  above  ■ 
property  is  enumerated  under  building  policies,  that  this 
item  does  not  cover  such  property."  \ 

NOTE :  Used  on  policies  covering  machinery  or  fix-  < 
tures. 

(19)  ''The  enumeration  herein  is  intended  to  be  de-  ; 
scriptive  not  restrictive."  i 

NOTE :     Used  on  any  kind  of  form,  but  of  little  effect.      ; 

(20)  "If  any  policy  of  fire  insurance  covering  prop-  ] 
erty  described  herein  is  subject  to  coinsurance  or  aver-  ; 
age  conditions,  this  policy  shall  be  subject  to  the  same  i 
conditions."  .j 

NOTE:     This  conditional  coinsurance  clause  was  for-      j 
merly  quite  often  used,  but  seldom  now,  and  it  is  doubtful 
if  such  a  provision  could  be  enforced. 

(21)  "It  is  understood  that  pictures  or  other  property 
on  which  there  is  specific  insurance  are  not  covered  by 
this  item." 

NOTE :     Used  on  household  furniture  policies.  .^ 

(22)  "It  is  understood  that  property  purchased  on  ^ 
the  installment  plan  is  included  in  this  policy,  and  for  ^ 
the  purpose  of  this  insurance  the  insured  is  considered 
the  sole  and  unconditional  owner  of  such  property."  '^ 


SPECIAL   AGREEMENTS  213 

(23)  "Property  purchased  under  any  installment  or 
credit  plan  is  covered  under  this  item  to  the  extent  only 
of  the  insured's  interest  therein." 

NOTE:  These  two  clauses  are  used  mostly  on  house- 
hold furniture  policies. 

(24)  ''It  is  understood  that  such  of  the  above  de- 
scribed property  as  may  be  the  subject  of  more  specific 
insurance  is  not  covered  hereunder. ' ' 

NOTE:  Used  on  stock  and/or  machinery  forms,  but 
not  always  permitted. 

(25)  ''It  is  understood  and  agreed  that  loss,  if  any,  on 
goods  contracted  for  and  awaiting  shipment  shall  be  ad- 
justed on  the  basis  of  the  contract  price." 

NOTE:  Used  on  merchandise  forms,  but  not  always 
permitted. 

(26)  "For  the  purpose  of  adjustment  of  loss,  if  any, 
under  this  policy,  it  is  understood  and  agreed  that  stock 
and/or  supplies  purchased  from  another  department  of 
insured's  industries,  and  insured  under  this  policy,  shall 
be  considered  the  same  as  though  purchased  elsewhere." 

NOTE :  Used  on  stock  policies  under  conditions  as  in- 
dicated. 

INVENTORY  AND  IRON  SAFE  CLAUSE 

{Requirement  to   Keep   Books   and  Inventory) 

It  is  made  a  condition  of  this  insurance:  (1)  That  the  assured 
under  this  policy  shall  take  an  inventory  of  the  stock  and  other 
personal  property  hereby  insured  at  least  once  every  twelve  months 
during  the  term  of  this  policy,  and  unless  such  inventory  has  been 
taken  within  one  year  prior  to  the  date  of  this  policy,  one  shall 
be  taken  in  detail  within  thirty  (30)  days  thereafter;  (2)  That 
the  assured  shall  keep  a  set  of  books  showing  a  complete  record 
of  business  transacted,  including  all  purchases  and  sales  both  for 
cash  and  credit;  (3)  That  the  assured  shall  keep  such  books  and 
inventory  securely  locked  in  a  fireproof  safe  at  night,  and  at  all 
times  when  the  store  mentioned  in  the  within  policy  is  not  actually 
open  for  business,  or  in  some  secure  place  not  exposed  to  a  fire 
which  would  destroy  the  building  where  such  business  is  carried 
on;  (4)  That  in  case  of  loss  the  assured  shall  produce  such 
books  and  last  inventory. 

NOTE:   Used  on  stock  policies. in  certain  territories. 


214 


THE  AGENTS   KEY  TO   FIRE  INSURANCE 


EXPOSURE   CLAUSE 


It  is  made  a  condition  of  this  insurance  that  no  change  in 
exposure  shall  take  place  during  the  term  of  this  policy,  by 
the  erection  of  other  buildings,  or  otherwise,  within  sixty  (60) 
feet  of  property  insured  hereunder  without  due  notice  to  this 
company  and  consent  therefor  endorsed  hereon. 

NOTE:  Used  in  some  territories  on  dwelling  and  mer- 
cantile policies. 

RUBBISH   CLAUSE 

In  consideration  of  the  rate  of  premium  at  which  this  policy 
is  written,  it  is  a  condition  of  this  insurance  that  the  premises 
described  in  this  policy  shall  be  kept  clear  of  loose  hay,  dry  grass, 
weeds  and  tubbish  for  a  distance  of  at  least  fifty  (50)  feet 
surrounding  any  building  described  in  this  policy;  and  in  the 
event  of  failure  on  the  part  of  the  assured  to  comply  with  the 
foregoing  condition,  this  policy  shall  be  null  and  void. 

NOTE :  Used  in  some  places  on  oil  tank,  hay  barn  and 
similar  policies. 

BITUMINOUS    COAL    OR    SPONTANEOUS 
COMBUSTION   CLAUSE 

{Uniformity  East) 
In  consideration  of  the  rate  of  premium  at  which  this  policy  is 
written — no  claim  will  be  made  on  this  Company  for  loss  or 
damage  to  coal,  or  for  salvaging  thereof,  resulting  from  fire  or 
heat  caused  by  fire  originating  in  the  coal  stored  on  the  premises 
described  in  this  policy. 

Radio  Equipments.  The  installation  of  radio  receiving  and 
signalling  apparatus  has  recently  been  so  extensive  that  the 
National  Board  of  Fire  Underwriters  (New  York)  has  issued 
rules  and  regulations  therefor  which  are  now  available  upon 
request.  While  there  might  be  exceptions  thereto,  it  is  the 
general  opinion  among  underwriters  that  the  presence  of 
either  broadcasting  or  receiving  apparatus  properly  installed 
is  not  an  increase  of  hazard  as  contemplated  in  the  fire 
insurance  policy  and  therefore  it  is  not  considered  necessary 
that  policy  be  endorsed  with  privilege  for  such  installation 


DIVISION  III 
RESIDENCE  PROPERTY  FORMS 

Policies  on  this  class  of  property  usually  cover,  separately, 
the  building  and  the  contents,  except  that  barn  contents  are 
often  required  'to  have  the  livestock  covered  under  a  separate 
item,  and  farm  barn  contents  require  a  further  separation. 
Policies  usually  contain  the  following  permits  and  clauses, 
worded  in  accordance  with  local  rules: 

Other  Insurance,  Lightning,  Electric  or  other  Lighting  that 
may  be  required,  Kerosene  Oil  Stove,  Mechanics,  Gasoline  or 
Benzine  for  Household  Use ;  also  Vacancy  or  Unoccupancy  as 
permitted,  together  with  such  other  clauses  as  may  be  neces- 
sary or  desirable,  or  as  may  be  required  by  local  underwriting 
rules.    (See  also  Special  Agreements.) 

Incubators,  brooders  or  hovers,  if  used,  require  a  special 
permit  applying  to  the  building  (or  contents)  where  kept; 
likewise  a  special  permit  is  required  if  an  automobile  is  kept 
in  any  building  insured.     (See  also  Special  Agreements.) 

NOTE: — (a)  Under  various  restrictions  locally  applying, 
fences,  lawn  furniture,  yard  fixtures,  shrubbery,  outside 
toilets,  other  small  outbuildings,  and  similar  property,  may  be 
covered  under  the  dwelling. 

(b)  Usually  the  following  clause  will  be  approved  in  a 
policy  covering  household  furniture: 

**It  is  understood  that  carpets,  rugs,  oil  cloths,  bedding, 

linen    and    wearing    apparel    are    covered    while    being 

cleaned,  aired  or  dried  out-of-doors  on  same  premises. ' ' 

Each  item  of  the  forms  given  herewith  may  be  used  on 
separate  policies,  or  may  be  brought  together  in  one  policy  in 
such  combination  as  may  be  desired  or  needed. 

DWELLING,  HOUSEHOLD  FURNITURE,  STABLE 
AND  CONTENTS  FORM 

1.  $ On  the story roof building,  and 

additions,  adjoining  and  communicating,  including  foundations, 
plumbing,  steam,  gas  and  water  pipes;  lighting  and  heating  appa- 
ratus and  all  permanent  fixtures;  plate  and  ornamental  glass  and 
fresco  work;  also  storm  doors  and  windows,  screens,  screen  doors, 
awnings,  whether  in  position  or  stored  in  said  building,  or  stored 
in  outbuildings  on  premises  described  below;  while  occupied  as  a 
dwelling  by  not  more  than families,  situate 

215 


216  THE  AGENTS   KEY   TO   FIRE-INSURANCE 

2.  $....0n  household  furnishings  and  utensils  of  every  descrip- 
tion, useful  and  ornamental;  fuel  and  family  stores;  printed  books 
and  music,  pictures,  paintings,  engravings  and  mirrors  and  their 
frames  (value  in  case  of  loss  not  to  exceed  cost)  ;  wearing  apparel, 
watches  and  jewelry  in  use,  works  of  art,  traveling  equipments, 
musical  and  scientific  instruments,  sporting  equipment,  bicycles,  tools 
and  implements;  awnings,  window  and  door  screens,  gas  fixtures, 
and  gas  chandeliers,  when  owned  by  the  insured  and  not  covered 
under  the  building  insurance,  and  all  other  personal  property  for 
household  use  or  personal  adornment — the  property  of  the  insured 
or  any  member  of  the  immediate  family,  and  on  the  legal  liability 
of  the  insured  for  loss  or  damage  to  similar  property  of  others.  It 
is  understood  and  agreed  that  pictures,  or  other  property,  specifically 
insured  are  not  covered  under  this  item;  musical  instruments  and 
household  furnishings  purchased  on  the  installment  plan  are  covered 
to  the  extent  only  of  the  insured's  interest  therein  and/or  liability 
therefor.  All  while  contained  in  or  on  or  attached  to  the  above 
described  building  and  additions. 

3.  $ On  the story roof building,  and 

additions  adjoining  and  communicating,  and  all  permanent  fixtures 
therein,  thereon  and  belonging  thereto,  while  occupied  as  a  private 
barn  or  tool  house,  and  situated  on  the  above  described  premises. 

4.  $....0n  horses,  in  case  of  loss  no  one  horse  to  be  valued  at 

over  $ ,  and  on  vehicles  (excluding  automobiles  and  motor 

cycles),  horse  and  carriage  equipments,  hay,  grain  and  feed,  barn 
and  garden  tools,  liveries,  and  household  furniture  in  use  therein, 
while  contained  in  the  above  described  barn. 

5.  $. . .  .On    

It  is  understood  and  agreed  that  this  policy  shall  not  cover  on 
any  item  except  for  the  amount  set  opposite  thereto. 

Loss,  if  any,  on  building (s),  payable  to as interest 

may  appear;  subject  to  the  conditions  of  this  policy. 

Privileges. — Permission  is  given:  For  existing  communications; 
for  other  insurance  without  notice  until  required ;  for  mechanics  to 
be  employed  for  ordinary  alterations  and  repairs;  to  use  kerosene 
oil  and  natural  gas  for  lighting,  heating  and  cooking,  providing 
kerosene  is  of  the  standard  110  degree  test  or  more;  to  keep  on 
hand  not  exceeding  one  quart,  per  family,  of  gasoline,  benzine  or 
naphtha  for  household  use,  but  the  use  thereof  for  cooking,  heating 
or  lighting  is  prohibited  without  special  permission  indorsed  on  this 

policy;  to  be  vacant  not  exceeding consecutive  months  at  any 

one  time  in  any  one  year,  or  to  be  unoccupied  not  exceeding 

consecutive  months  in  any  one  year. 

Standard  Lightning  Clause. — This  policy  shall  cover  any  direct 
loss  or  damage  caused  by  lightning  (meaning  thereby  the  commonly 
accepted  use  of  the  term  lightning,  and  in  no  case  to  include  loss 
or  damage  by  cyclone,  tornado  or  windstorm),  not  exceeding  the 
sum  insured,  nor  the  interest  of  the  insured  in  the  property,  and 


RESIDENCE  PROPERTY  217 

subject  in  all  other  respects  to  the  terms  and  conditions  of  this 
policy;  provided,  however,  if  there  shall  be  any  other  insurance 
on  said  property,  this  company  shall  be  liable  only  pro  rata  with 
such  other  insurance  for  any  direct  loss  by  lightning,  whether  such 
other  insurance  be  against  direct  loss  by  lightning  or  not.  If  dyna- 
mos, exciters,  lamps,  motors,  switches  or  other  electrical  appliances 
or  devices  are  covered  under  this  policy,  this  Company  shall  not 
be  liable  for  any  electrical  injury  or  disturbance,  whether  from 
artificial  or  natural  causes,  unless  fire  ensues,  and  then  for  the  loss 
by  fire  only. 

Attached  to  and  made  a  part  of  Policy  No of  the 

Insurance  Co.,  of issued  at  its. Agency. 

Dated ,    191 • Agent. 

DWELLING  AND   HOUSEHOLD   FURNITURE   FORM 

{Uniformity   West) 
(For  Use  on  Either  Fire  or  Tornado  Policies) 

On  the  following  described  propert)^  all  situated 

*1  $.  . .  .On  the story roof building, 

including  foundations,  plumbing,  electric  wiring  and  stationary 
heating,  lighting  and  ventilating  apparatus  and  fixtures  therein; 
awnings  (awnings  covered  under  fire  policies  only),  door  and 
window  screens,  and  storm  doors  and  windows;  also  all  per- 
manent fixtures  belonging  to  and  constituting  a  part  of  said 
building;  occupied,  and  to  be  occupied,  only  for  dwelling  purposes. 

If  the  building  hereby  insured  is  occupied  by  tenants,  this  insur- 
ance shall  also  cover  under  this  item,  if  the  property  of  owner 
of  building  and  not  otherwise  insured,  floor  coverings,  mirrors, 
stoves,  refrigerators,  cleaning  apparatus,  hose  and  other  fire 
extinguishing  appliances,  fuel,  janitor's  tools  and  implements,  all 
constituting  a  part  of  the  equipment  and  service  of  the  building 
and  only  while  contained  in,  or  attached  to,  the  above  described 
building. 

This  insurance  shall  also  cover  under  this  item,  if  the  property 
of  owner  of  building,  awnings,  door  and  window  screens  and 
storm  doors  and  windows,  belonging  to  above  described  building, 
while  stored  in  outbuildings  on  the  above  described  premises. 

*2  $ On  household  and  kitchen  furniture  and  utensils,  useful 

and  ornamental  (the  property  of  assured  and  all  members  of 
assured's  family),  including  carpets,  rugs,  draperies,  curtains,  beds, 
bedding,  linen,  family  wearing  apparel  and  materials  for  same; 
plate  and  plated  ware;  printed  books  and  music;  piano  stool  and 
cover;  piano  and  other  musical  instruments;  mirrors,  portraits, 
pictures,  paintings,  engravings,  including  their  frames,  statuary 
and  sculpture,  all  at  not  exceeding  cost;  watches  and  jewelry  and 
bicycles  in  use ;  baby  carriages,  amateur  photographic  outfit  and 
supplies;  fishing  tackle,  firearms,  athletic  and  sporting  implements; 


218  THE  AGENTS   KEY   TO   FIRE   INSURANCE 

mechanics',  carpenter  and  garden  tools  and  implements;  type- 
writers, sewing  machines,  trunks,  traveling  equipments,  canes  and 
umbrellas;  lamps,  china,  glass  and  crockery  ware;  fuel,  family 
stores  and  supplies;  electrical  apparatus,  appliances  and  devices; 
scientific  apparatus,  appliances,  devices  and  implements;  and  all 
other  furniture  and  fixtures  not  belonging  to  and  constituting  a 
permanent  part  of  the  building;  all  only  while  contained  in,  or 
attached  to,  above  described  building;  also,  if  not  otherwise  in- 
sured, porch  and  lawn  furniture,  bicycles  in  use,  trunks  (excluding 
contents  of  same),  tools,  fuel  and  supplies,  while  stored  in  out- 
buildings on  the  above  described  premises. 

This  insurance  shall  also  cover  under  this  item,  if  the  property 
of  tenant  and  not  otherwise  insured,  awnings,  door  and  window 
screens  and  storm  doors  and  windows,  while  contained  In,  or 
attached  to,  above  described  building  (attached  awnings  covered 
under  fire  policies  only),  or  while  stored  in  outbuildings  on  the 
above  described  premises. 

This  insurance  shall  also  Include  the  Interest  of  the  assured 
in  articles,  covered  under  this  item,  purchased  on  the  installment 
plan. 

*3  $ On  the roof building,  including  founda- 
tions, occupied  as  a  private  garage. 

*4  $.  . .  .On  the roof building,  including  founda- 
tions, occupied  as  a  private  barn. 

*5  $....0n  horses  and  cows;  in  case  of  loss  this  Company  will 

not  be  liable  for  more  than  $ on  any  one  horse,  or  more  than 

$. .  .  .on  any  one  cow,  and  only  for  its  pro  rata  proportion  thereof  in 
case  of  other  Insurance,  only  while  contained  in  above  described 
barn,  and,  provided  this  form  is  attached  to  a  fire  policy,  against 
loss  by  Lightning  while  on  or  off  the  premises. 

*6  $....0n  vehicles  (excepting  automobiles  and  motorcycles, 
storage  and  use  of  which  is  prohibited  (under  fire  policies)  unless 
permission  is  specifically  endorsed  hereon)  ;  robes,  horse  and  car- 
riage equipment,  bicycles  in  use;  hay,  grain,  feed,  coal  and  wood; 
carpenter,  barn  and  garden  tools  and  Implements;  all  only  while 
contained  in  above  described  barn. 

*7  $ On   sheds,  outbuildings   and  fences   on  above   described 

premises. 

*8  $....0n \ 

*9  $....0n 

*No  insurance  attaches  under  any  of  the  above  items  unless  a 
certain  amount  is  specified  and  inserted  in  blank  immediately  pre- 
ceding the  item. 

NOTE  (for  infonnation  only) :  The  above  described 
dwelling  is  occupied,  or  to  be  occupied,  by families. 


RESIDENCE  PROPERTY  219 

Not  exceeding  ten  (10)  per  cent,  of  the  amount  of  any  item  of 
this  policy  on  personal  property  shall  cover  also,  as  per  above 
form,  property  of  guests,  and  servants,  loss,  if  any,  to  be  adjusted 
with  and  payable  to  the  assured  named  in  this  policy. 

AUTOMOBILE    PERMIT 

{Gasoline  or  Steam   Poiver) 

(This    permit    is   void    unless    number    of   machines    and    location 

of  same  is  given) 

Subject  to  the  following  conditions,  permission  is  granted,  when 
not  in  violation  of  any  law,  statute  or  municipal  restriction,  to 
keep  not  more  than (state  number) automobiles  using  gaso- 
line, in  building  described  under  item  No of  this  policy. 

The  conditions  of  this  permit,  in  so  far  as  they  are  within  control 
of  the  assured,  are  as  follows: 

1 — That  no  claim  shall  be  made  for  loss  or  damage  to  an  auto- 
mobile, any  of  its  parts  or  equipment,  unless  such  automobile, 
its  parts  or  equipment,  is  specifically  mentioned  as  insured  under 
this  policy. 

2 — That  the  filling,  emptying  or  opening  of  any  gasoline  reservoir 
of  an  automobile,  while  the  same  is  contained  in  said  building, 
shall  be  done  by  daylight  or  incandescent  electric  light  only,  and 
that  there  shall  be  no  other  artificial  light,  and  no  fire  or  blaze 
in  the  room  where  and  when  such  reservoir  is  being  filled  or 
emptied,  or  open. 

3 — That  there  shall  be  no  gasoline  in  excess  of  ten  (10)  gallons 
(which  shall  be  contained  in  tight  and  entirely  closed  metal  cans, 
free  from  leak),  kept  or  used  inside  of  said  building,  except  that 
contained  in  the  reservoirs  of  automobiles. 

4 — That  the  supply  tank  shall  be  at  least  five  (5)  feet  from 
said  building,  unless  it  is  buried  at  least  two  (2)  feet  below 
the  level  of  the  basement  floor.  All  pipes  for  filling  or  ventilating 
the  supply  tank  to  be  outside  said  building,  and  piping  to  pump 
to  be  laid  so  as  to  drain  toward  the  tank. 

5 — That  when  acetylene  gas  is  used  for  automobile  lamps,  it 
shall  be  contained  in  an. airtight  metal  tank  or  generator,  and  not 
over  twenty-five  (25)  pounds  of  calcium  carbide  shall  be  kept 
in  said  building,  the  same  to  be  contained  in  water-tight  metal 
receptacles. 

6 — The  term  "gasoline"  shall  be  held  to  include  naphtha,  benzine, 
or  any  of  the  light  products  of  petroleum,  coal  or  tar,  by  whatever 
name  known. 

7 — The  term  "automobile"  shall  be  held  to  include  motorcycles, 
or  any  other  self-propelled  vehicle  using  gasoline  or  steam. 

Permission  is  hereby  granted  for  the  within  described  premises 
to  be  and  remain  vacant  for  a  period  not  exceeding  sixty  (60)  days 
at  any  one  time,  the  term  "vacant"  being  construed  to  mean  an 


220                 THE  AGENTS   KEY   TO   FIRE   INSURANCE  ] 

J 

( 

empty  building  devoid  of  personal  habitation;  or  to  be  and  remain  I 

unoccupied  for  a  period  not  exceeding  six   (6)   months  at  any  one  j 

time,  the  term  "unoccupied"  being  construed  to  mean  a  dwelling 

that  is  entirely  furnished,  but  with  personal  habitation  temporarily  1 

absent.  \ 

It  is  agreed  by  the  assured  that  the  premises  shall  be  kept  prop-  j 

erly  closed  and  secured  to  prevent  trespassing  or  the  entrance  of  j 

unauthorized  persons  during  the  term  of  vacancy  or  unoccupancy.  ; 

(Attach  other  usual  clauses.)  I 

DWELLING   FORM— BUILDING  AND    (OR)    HOUSE-  ■ 

HOLD  FURNITURE  '■. 

{Undernvriters'  Association  of  the  Middle  Department) 

$....0n    the story roof building,     and  j 

additions  thereto  adjoining  and  communicating,  all  while  occupied  ; 

as  a  Dwelling  House,  including  foundations,  exterior  attachments,  i 

plate   glass,    fresco    and   wall    decorations,    plumbing,    gas,    water,  | 

steam   and  ventilating  pipes,   stationary  heating   and  lighting   ap-  j 

paratus,  electric  wiring,  burglar  alarms,  chandeliers,  gas  fixtures  I 

and   appurtenances  thereto;   storm  and  screen  doors,  outside  win-  \ 

dows    and   blinds,    screens,    and   awnings,   whether   in   position   or  ' 

stored  therein  or  in  any  outbuilding  located  on  premises  connected  j 

with    said    Dwelling    and    on    all    permanent    fixtures    therein    or  ; 

thereon ;  situated i 

$....On  household  furniture,  useful  and  ornamental;   including 

carpets,  rugs  and  oil  cloth,  beds,  bedding,  linen,  wearing  apparel  j 

and  material  for  same;   curtains   and  draperies;   trunks,  satchels,  : 
umbrellas,   parasols,    canes,   fans;    plate,   plated   and   metal   ware, 

glass  and  china  ware;  printed  books  and  music;  sewing  machines;  \ 

mirrors,  opera  and  eye  glasses,  clocks,  watches  and  jewelry  in  use,  ; 

musical    instruments,   phonograph,   phonographic  and  musical   rec-  : 

ords;  statuary,  bronzes,  bric-a-brac  and  other  works  of  art,  paint-  ! 

ings    and    engravings    and    their    frames,    at    not   to    exceed    cost;  ; 

billiard  and  pool  tables  and  appurtenances;  games  and  toys;  baby  i 

carriages;  sportsmen's  outfit;   bicycles,  excluding  motor  cycles,  the  ! 

housing    of    which    is    prohibited,    unless    otherwise    provided    by  j 

agreement  in  writing  added  to  this  policy;  cameras  and  amateur  \ 

photographers'   outfit,    artists'   materials;    vacuum   cleaner   and   its  ■ 
attachments,  house  and  garden  tools  and  implements;  kitchen  and 

laundry    utensils    and    appliances;    fuel,    family    stores,    and    such  I 
other  articles  as  are  of  common  household,  family,  or  personal  use, 

wear,   adornment,   or   amusement,   the   property  of  the   assured  or  i 

any  member  of  the  family;   it  being  understood   and  agreed  that  ; 
pictures    or    other    property    specifically    insured    are    not    covered 
under    this    item;    and    that    musical    instruments    and    household 

furnishings   purchased  on  the  installment  plan   are  covered  here-  i 

under   only   to   the   extent   of   the    assured's   payment   thereon;    all  ' 

while  contained  in ' 

(Attach  usual  clauses.)  ! 


RESIDENCE  PROPERTY  221 

PROTECTED    DWELLING   AND   FURNITURE   FORM 

{Ne^    York   State) 

$ On    the story building    and    additions,    with 

roof,  while  accupied  as  a  Dwelling,  including  all  per- 
manent fixtures  belonging  thereto  while  therein  or  thereon,  situate 
No on  the side  of Street,  within  the  cor- 
porate   limits    (City    or    Village)    of County    of 

State  of  New  York,  and  located  within  500  feet  of  a  public  hydrant 
and  within  1^  miles  of  a  regularly  organized  and  equipped  public 
fire  department  station  of  said  municipality.  This  insurance  also 
to  cover  awnings,  door  and  window  screens,  storm  doors  and 
windows,  belonging  to  the  dwelling,  in  place  or  stored  in  the 
above  building  or  in  the  outbuildings  on  the  premises. 

$..0n  household  and  personal  property  of  every  description 
such  as  is  usual  or  incidental  to  a  dwelling,  belonging  to  the 
assured,  or  any  member  or  servant  of  the  family  (including 
drawings  and  manuscripts,  at  not  exceeding  cost,  but  excluding 
articles  specifically  insured),  all  while  contained  in  the  above 
described  dwelling. 

{a)  All  buildings  hereby  insured,  or  containing  the  property 
insured,  have  none  other  than  chimneys  or  flues  constructed  of 
brick  or  stone  (if  built  of  stone  they  have  flue  linings)  built 
from  the  ground  or  from  a  living  room  and  not  from  an  attic, 
and  all  smoke  pipes  enter  chimneys  or  flues  unobstructed  from 
view  at  a  point  below  the  attic,  except  as  folloivs: 

{b)  None  of  the  buildings  hereby  insured  or  containing  the 
property  insured  is  in  a  continuous  row  or  group,  except  as 
folloius  :    

{c)  The  dwelling  hereby  insured  or  containing  the  property 
insured  is  not  occupied  by  more  than  three  families  and  the  barn 
is  not  used  for  the  stabling  of  more  than  four  horses,  except  as 
folloivs: 

(Attach  usual  clauses.) 

DWELLING  AND   FURNITURE  FORM 

{Nenu  Jersey) 

$ On  the story roof building,  additions 

and  extensions  thereto,  and  all  permanent  fixtures  therein,  thereon 
and  belonging  thereto,  including  plumbing,  steam,  gas  and  water 
pipes  and  fixtures,  electric  light  wiring  and  fixtures,  permanent 
apparatus  for  heating  and  cooking,  awnings,  stoops,  sidewalks, 
mason  and  iron  work,  and  fences  connected  therewith,  while 
occupied  exclusively  for  dwelling  purposes  by  not  exceeding  two 
families,  situated 

$ On  household  furniture,  useful   and  ornamental,   including 

beds,  bedding,  linen,  wearing  apparel,  plate  and  plated  ware, 
printed  books  and  music;  pictures,  paintings  and  engravings  and 


222  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

their  frames,  bronzes,  statuary  and  other  works  of  art  and  objects 
of  virtu  (at  not  exceeding  cost  price)  ;  all  musical  and  scientific 
instruments,  sewing  machines,  mirrors,  jewelry  and  precious  stones 
in  use,  fuel  and  family  stores  and  supplies,  tools,  toys,  bicycles, 
guns  and  other  sporting  goods  and  utensils  the  property  of  the 
insured  or  any  member  of  the  family,  all  while  contained  in  the 
above-described  building. 

It  is  understood  and  agreed  that  the item  of  this  policy 

also  covers  awnings,  door  and  window  screens,  and  storm  doors 
and  windows,  while  attached  to  above-described  building,  or  in 
amount  not  to  exceed  $200  while  stored  in  outbuildings  upon  the 
above-described  premises. 

(Attach  usual  clauses.) 

DWELLING  AND  HOUSEHOLD  FURNITURE  FORM 

(S.  E.   U.  A.) 

$....0n    the story building,    its    additions    and 

foundations,  with roof,  occupied  by as  a  Dwelling 

House,  including  all  permanent  fixtures,  wiring  and  cistern;  also 
window  and  door  screens  and  awnings,  contained  in  or  on  said 
building  or  stored  in  other  buildings   on  same  premises;   situate 

$ On  Household  and  Kitchen  Furniture  of  every  description, 

useful  and  ornamental.  Family  Wearing  Apparel  and  Material 
for  same.  Traveling  Equipment,  Books,  Musical  Instruments  and 
Music,  Pictures,  Engravings  and  their  Frames  (at  not  exceeding 
cost),  Firearms  and  Accoutrements,  Bicycles,  Bronzes,  Statuary, 
Articles  of  Virtu,  Jewelry  in  use,  Fuel  and  Household  Stores 
and  such  other  articles  as  are  generally  used  in  housekeeping,  the 
property  of  assured  or  of  any  member  of  the  family,  only  while 
contained  in  the  above  described  Dwelling  and  its  additions. 

$ On  the building,  with roof,  and  its  additions, 

situate  on  above  described  premises,  including  foundations,  and 
occupied  as  a  Servants'  House. 

$ On  the building,  with roof,  and  its  additions, 

situate  on  above  described  premises,  including  foundations,  and 
occupied  as  a  Private  Barn. 

$ On 

(Attach  usual  clauses.) 

DWELLING  OR  APARTMENT  HOUSE  FORM 

$ On  the building  occupied  as situate 

It  is  understood  and  agreed  that  this  policy  covers  additions  and 
extensions  adjoining  and  communicating;  plate  glass,  frescoes  and 
decorations  without  restriction;  gas  and  electric  fixtures  and  chan- 
deliers, mirrors,  steam,  gas  and  water  pipes  and  fixtures,  plumb- 


RESIDENCE  PROPERTY  223 

ing  work  and  all  permanent  fixtures,  engines,  boilers  and  connec- 
tions, heating  apparatus,  machinery,  elevators  and  hoisting  ap- 
paratus, dynamos,  electric  apparatus,  fixtures,  wire  screens  and 
awnings,  contained  in  or  attached  to  the  building  or  under  the 
sidewalk  in  front  thereof. 

It  is  understood  and  agreed  that  this  policy  also  covers  awn- 
ings, door  and  window  screens,  and  storm  doors  and  windows, 
while  in  or  attached  to  above  described  building  or  stored  in  out- 
buildings upon  the  above  described  premises. 

Personal  Property  Clause. — If  the  building  insured  under  first 
item  is  occupied  by  two  or  more  families  for  dwelling  purposes, 
then,  personal  property,  if  any,  of  the  following  kinds  belonging 
exclusively  to  the  insured  hereunder,  as  building  landlord  and 
not  as  tenant,  and  in  actual  use  solely  for  the  furnishings  of  said 
building,  viz.:  floor  coverings  of  public  halls  and  stairs,  window 
shades,  awnings,  and  screens  belonging  to  said  building  and  at- 
tached to  or  stored  therein,  fuel  contained  and  intended  for  use 
therein,  employees'  uniforms  and  janitor's  supplies,  is  covered  here- 
under. 

(Add  usual  clauses.) 

DWELLING   FORM    (Where   Permitted) 

{Extended  Description) 

$ On  the Dwelling  and/or  additions  adjoining  and/or 

communicating,  and  all  permanent  fixtures  attached  thereto  and/or 
contained  therein,  or  connected  with  same,  including  foundations, 
porches,  verandas,  lighting,  heating,  ventilating  and/or  plumbing 
apparatus,  (stationary  wiring  and/or  piping),  machinery  used  in 
the  maintenance  of  building,  mill-wright  work,  stoves,  ranges,  fur- 
naces, gas  and/or  electric  fixtures,  electric  bells,  speaking  tubes, 
interior  telephone  systems,  enunciators,  plate,  ornamental  and 
stained  glass  windows  and  doors;  decorations,  wall  paper,  frescoes, 
wall-safes,  signs,  awnings,  screens  and/or  storm  doors,  platforms, 
elevators,  dumb  waiters  and  all  other  building  equipment,  appa- 
ratus rind/or  appurtenances  even  though  not  specifically  mentioned, 
whether  in  place,  stored  in,  attached  to  the  outside  and/or  on  the 
roof  of  building  and/or  additions;  also  architect's  and/or  inspec- 
tor's fees  for  supervising  replacements  and/or  repairs;  also  side- 
walks,   outside    toilets    and/or    fencing    on    the    premises.      Situate 


(Add  usual  clauses.) 

HOUSEHOLD  FURNITURE  FORM 

$ On  household,  personal,  professional  and  scientific  furniture, 

fixtures  and  eflfects  of  every  description,  and  all  articles  for  orna- 
ment, entertainment,  consumption,  wear  or  display  for  household  or 
personal  use,  the  property  of  the  insured  or  any  member  of  the 
immediate  family,  and  on  the  legal  liability  of  the  insured  for 
loss  or  damage  to  similar  property  of  others; 


224  THE  AGENTS   KEY   TO   FIRE   INSURANCE 

Including  awnings,  casts,  curiosities,  drawings,  dies,  implements, 
jewels,  models,  medals,  patterns,  pictures,  scientific  apparatus, 
signs,  sculpture  and  tools; 

Excluding  accounts,  bills,  currency,  deeds,  evidences  of  debt, 
money,  notes,  securities,  bullion  and  manuscript. 

All  while  contained  in  or  on  or  attached  to  the  building  and  ad- 
ditions,  adjoining   and   communicating,   occupied   as 

situate 

(Add  usual  clauses.) 

HOUSEHOLD   FURNITURE   FORM 

{Extended  Description) 

$....0n  household  and  kitchen  furniture  of  every  description, 
useful  and  ornamental,  utensils  and  furnishings,  lambrequins,  cur- 
tains, window-shades,  blinds  and  hangings,  beds,  bedding,  linen, 
carpets,  rugs,  toilet  articles,  wearing  apparel,  plate,  plated-ware, 
crockery,  china  and  glassware,  pianos,  organs  and  other  musical 
instruments,  covers  and  stools,  chandeliers,  electroliers,  lamps, 
library  of  printed  books  and  music,  pictures,  engravings,  photo- 
graphs, portraits,  mirrors  and  their  frames,  bronzes,  statuary,  works 
of  art,  bric-a-brac  and  objects  of  virtu,  casts,  models,  curiosities, 
scientific  and  mechanical  instruments,  appliances,  utensils,  tools  and 
implements,  billiard  and  pool  tables  and  appurtenances,  fire-arms, 
military  and  society  equipments,  articles  for  use,  recreation,  amuse- 
ment or  personal  adornment,  sporting,  photographic  and  traveling 
outfits,  canes,  umbrellas,  parasols,  fans,  opera  and  field  glasses, 
artists'  materials,  garden  implements,  hose  and  reel,  bicycles,  motor- 
cycles, velocipedes,  baby  carriages,  tricycles  and  other  vehicles, 
smokers'  articles,  toys,  small  wares,  embroideries,  materials  for 
personal,  family  or  household  use,  in  process  of  making  or  not 
made  up,  clocks,  ornaments,  safes,  typewriting,  adding,  duplicating 
and/or  billing  machines,  sewing  machines,  and  appurtenances, 
watches,  jewelry  and  precious  stones,  robes  and  outfits  for  riding 
and  driving,  signs,  awnings,  screens  and/or  storm  doors,  flags, 
plants  and  shrubbery,  birds  and  cages,  natural  history  specimens 
and  their  appurtenances,  wines,  liquors,  household  supplies,  and 
family  stores  and  fuel  and  all  articles  used  for  ornamentation, 
amusement,  travel,  study  or  research,  the  property  of  the  assured, 
or  any  member  of  the  family  household,  their  relatives,  friends, 
guests,  and/or  servants,  the  property  of  the  assured  or  in  which 
the  assured  may  have  an  interest  or  for  which  the  assured  may  be 
liable  or  sold  but  not  removed,  including  all  other  household  equip- 
ment, apparatus,  and/or  appurtenances  even  though  not  specifically 
mentioned. 

All  while  contained  in,  attached  to  the  outside  and/or  on  the 
roof  of building  and/or  additions,  situate 

(Add  usual  clauses.) 


RESIDENCE  PROPERTY  225 


HOUSEHOLD   FURNITURE   FORM 

$ On  household  or  other  personal  property  for  use,  consump- 
tion or  adornment,  including  all  property  enumerated  in  the  policy 
on  which  liability  is  required  to  be  specifically  assumed;  the  prop- 
erty of  the  insured  or  any  member  of  the  immediate  family,  and 
on  the  interest  of  the  insured  in  and/or  liability  for  similar  property 
held  by  the  insured  on  storage,  or  for  repairs,  or  otherwise,  belong- 
ing in  whole  or  in  part  to  others;  all  while  contained  in,  on  or  at- 
tached to  the building,  or  while  temporarily  in  the  open  on 

premises,  situate 

Property  covered  under  the  building  item  is  not  covered  under 
the  contents  item,  nor  property  that  is  the  subject  of  more  specific 
insurance. 

(Attach  usual  clauses.) 

PRIVATE  GARAGE  AND  CONTENTS 

$ On  the building  and  additions  adjoining  and  com- 
municating, and  all  permanent  fixtures,  including  gasoline  and  oil 
apparatus,  attached  to  the  building,  while  occupied  as  a  private 
garage,  situate 

$ On   furnishings   and   equipment,   tools,   apparatus,    supplies, 

household  furniture  in  use,  liveries  and  all  similar  property,  while 
contained  in  the  above  described  garage. 

This  policy  shall  not  cover  motor-driven  vehicles;  nor  shall  it 
cover  on  other  property  that  is  more  specifically  insured. 

(Add  usual  clauses.) 

PRIVATE  BARN  AND  CONTENTS  AND  OUT- 
BUILDINGS (Illustration) 

$ On  the story roof building,  and  ad- 
ditions and  extensions  adjoining  and  communicating,  and  all  perma- 
nent fixtures  therein  and  thereon,  a  part  of  the  realty,  while  occu- 
pied as  a  private  barn  and  tool  house,  situate 

$....0n  horses  contained  therein  (limit  on  any  one  horse  not  to 
exceed  $ ) 

$ On  vehicles    (excluding  motor-driven  vehicles),  horse   and 

carriage  equipment,  liveries,  hay,  grain  and  feed,  barn  and  gar- 
den tools,  and  household  furniture  in  use  therein,  while  con- 
tained in  said  building. 

$....0n  tool  house  and  permanent  fixtures  therein  and  thereon, 
a  part  of  the  realty,  situate 

$....0n  play  house  and  permanent  fixtures  therein  and  thereon, 
a  part  of  the  realty,  situate 

$....0n  personal  property  of  all  descriptions  while  contained 
therein. 

(Add  usual  clauses.) 


226 


THE  AGENTS   KEY  TO   FIRE   INSURANCE 


COUNTRY   ESTATE   FORM    (Illustration) 

$. . .  .On  the  following  described  property  situate  on  the  premises 

of  the  insured  (location),  as  per  diagram  on  file  with  the.. 

Insurance  Company. 

Building. — The  term  building  shall  include  additions  and  ex- 
tensions adjoining  and  communicating,  foundations,  plumbing, 
steam,  gas  and  water  pipes;  lighting,  heating  and  service  ap- 
paratus, and  all  permanent  fixtures;  plate  and  ornamental  glass, 
fresco  work  and  decorations ;  also  storm  doors  and  windows, 
screens,  screen  doors  and  awnings,  whether  in  position  or  stored 
in  building,  or  belonging  to  the  building  and  stored  in  outbuild- 
ings on  the  premises  described  herein. 

Contents. — The  term  contents  shall  include  household  furnish- 
ings and  utensils  of  every  description,  useful  and  ornamental ; 
fuel  and  family  stores;  printed  books  and  music,  pictures,  paint- 
ings, engravings  and  mirrors  and  their  frames  (value  in  case  of 
loss  not  to  exceed  cost)  ;  wearing  apparel,  watches  and  jewelry  in 
use,  works  of  art,  traveling  equipments,  musical  and  scientific 
instruments,  sporting  equipment,  bicycles,  tools  and  implements; 
and  on  horses,  cows,  chickens  and  all  other  fowls  and  live  stock 

(limit  of  value  not  exceeding  $ each  on  horses,  $....each  on 

cattle,  $ each  on  pigs,  $ each  on  fowls),  vehicles  (exclud- 
ing motor  driven  vehicles),  horse  and  vehicle  equipment,  liveries, 
hay,  straw,  grain  and  feed,  barn  and  garden  tools,  and  all  other 
personal  property  for  use,  consumption  or  adornment,  including 
that  on  which  liability  is  required  by  the  policy  to  be  specifically 
assumed;  the  property  of  the  insured  or  any  member  of  his  own 
family,  and  on  the  legal  liability  of  the  insured  for  loss  or  damage 
to  similar  property  of  others.  This  item  shall  not  cover,  however, 
on  accounts,  bills,  currency,  deeds,  evidences  of  debt,  money,  notes 
or  securities;  nor  property  that  is  covered  under  the  building 
item;  nor  shall  personal  property  be  covered  under  any  general 
item  when  the  subject  of  more  specific  insurance. 

It  is  understood  and  agreed  that  the  amounts  stated  in  the  fol- 
lowing schedule  under  the  item  "building"  and/or  the  item  "con- 
tents," shall  attach  in  accordance  with  the  form  as  given  under 
those  respective  headings,  and  that  the  amount  of  insurance  is 
divided  and  applies  as  per  the  following  schedule,  viz.: 
Item         Description    of    Property      Buildings     Contents         Total 


On  main    dwelling 
On  carriage   house 

On  garage     

On  chicken   house 
On  tool    house    .  . . 
On  playhouse    .... 
On  farm  barn    . . . 
On  hav  barn    .... 


Totals 


$40,000 
9,000 
6,000 
1,000 
600 
400 
7,000 
2.000 

$66,000 


$30,000 
6,000 
2,000 
1,000 
800 
200 
8,000 
2,000 

$50,000 


$70,000 

15,000 

8,000 

2,000 

1,400 

600 

15,000 

4,000 

$116,000 


RESIDENCE  PROPERTY  227 

This   policy   shall   cover   a   pro   rata   proportion   of   each  of  the 
above  described  items. 
(Add  usual  clauses.) 

FARM  FORM 

{Neiv  York  State) 

Items    must    not    be    bracketed.      Farm    produce    must   be    insured 

specifically  in   each  building. 

(NOTE: — Most  rating  associations  have  farm  forms  that  are 
mandatory;  that  of  New  York  State  is  given  as  an  illustration.) 

$ . . . .  On story roofed building  with  ad- 
ditions, foundations  and  all  permanent  fixtures,  while  occupied  as 
a  private  family  residence. 

$ On  household  furniture,  useful  and  ornamental  (exclud- 
ing musical  instruments),  family  wearing  apparel,  fuel,  family 
provisions,  stores,  printed  books,  plate  and  plated  ware,  sewing 
machine,  pictures  with  their  frames  (not  exceeding  cost),  while 
contained  therein. 

$ On  musical  instruments,  while  contained  therein. 

$ On    farm   produce    in    excess   of   the    amount    required   for 

family  use  while  contained  therein. 

$ On   dairy  products   in   excess  of  the   amount  required  for 

family  use  while  contained  therein. 

$,...On  barn  No.  1  on  diagram,  including  sheds  and  additions 
attached. 

$ On   farm   produce   and  feed,  while  therein,    and   in   stacks 

within   100  feet.     See  paragraph    (e)    below. 

$....On 

$....0n  barn  No.  2  on  diagram,  including  sheds  and  additions 
attached. 

$....On  farm  produce  and  feed  while  therein,  and  in  stacks 
within  100  feet.     See  paragraph  (e)  below. 

$ On 

$..,.0n  barn  No.  3  on  diagram,  including  sheds  and  additions 
attached. 

$....0n  farm  produce  and  feed  while  therein.  See  paragraph 
(e)   below. 

$....0n  frame  building  while  occupied  as  granary,  No.  4  on 
diagram. 

$....On  farm  produce  and  feed  while  therein.  See  paragraph 
(e)   below. 

$.  . .  .On  farming  tools  and  utensils,  including  mower  and  reaper, 
while  in  said  barns. 

$.  . .  .On  wagons,  carriages,  excluding  motor  vehicles,  the  storage 
and  use  of  those  using  gasoline  being  prohibited,  unless  permission 
is  specifically  endorsed  hereon,  sleighs,  harness  with  carriage  and 
horse  equipment  while  in  said  barns.     See  paragraph    (h)    below. 


228  THE  AGENTS   KEY   TO   FIRE   INSURANCE 

$....0n  horses,  Class  1,  while  in  said  barns.  See  pro  rata 
clause. 

$....0n  sheep,  Class  2,  while  in  said  barns.  See  pro  rata 
clause. 

$....0n  cows,  oxen  or  bulls,  Class  3,  while  in  said  barns.  See 
pro  rata  clause. 

$. . .  .On  hogs.  Class  4,  while  in  said  barns.     See  pro  rata  clause. 

$....0n  young  stock  under  two  years  of  age,  Class  5,  while 
in  said  barns.     See  pro  rata  clause. 

$ On 

$.... TOTAL  INSURANCE. 

All   situated   on   the  farm   owned   by while   occupied   by 

in    the    Township    of County    of State    of 

New  York. 

For  a  more  complete  description,  reference  is  had  to  the  Appli- 
cation  and  Survey  of  the  Assured,  No ,   on  file  with  this 

Company,  which  is  a  warranty  by  the  assured  and  is  made  a 
part  of  this  contract. 

(a)  If  live  stock  is  insured  hereunder,  it  is  insured  subject 
to  the  provisions  of  the  "Live  Stock  Pro-Rata  Clause,"  as  follows: 

Live  Stock  Pro  Rata  Clause.  It  is  a  condition  of  this  contract 
that  the  amount  covered  upon  each  Class  of  live  stock,  as  above, 
shall  apply  at  the  time  of  loss  in  an  equal  sum  upon  each  animal 
in  the  proportion  that  the  number  of  animals  in  each  such  class 
shall  bear  to  the  total  amount  covered  on  that  class.  Provided, 
that  except  on  animals  covered  specifically  by  names  or  numbers, 
this    Company  shall    not   be    liable   for   more   than,   or   in   case   of 

other  insurance,  for  more  than  its  pro  rata  proportion  of ,  $ 

on  any  horse,  mule  or  colt;  $ on  any  head  of  cattle  over 

two  years  old;   $ on  any  head  of  cattle  under  two  years 

old;  $ on  any  sheep  or  $ on  any  hog,  nor  for  more 

than  the  actual  cash  value  of  any  such  animal. 

(b)  Live  stock  covered  by  this  policy  is  insured  against  death 
only  directly  caused  by  lightning,  meaning  thereby  the  use  of 
the  term  lightning  as  above  stated,  in  said  barns,  or  while  at 
large  on  owner's  premises  or  elsewhere. 

(c)  This  Company  shall  not  be  liable  for  any  loss  arising  from, 
or  occasioned  by,  the  use  of  open  lights,  or  gasoline,  burning 
fluid  or  any  chemical  oil,  for  any  purpose  in  any  barn  or  out- 
building insured  or  containing  property  insured  by  this  policy. 

(d)  Permission  is  hereby  granted  for  the  use  of  kerosene  oil 
for  lights  and  for  one  kerosene  oil  stove  in  dwelling,  provided 
lamps  or  lanterns  and  (or)  stove  are  filled  during  daylight  only 
and  when  flame  is  extinguished. 

(e)  The  use  of  fire  heat  in  any  barn,  hop  house,  fruit  house, 
evaporator  or  other  outbuilding  insured  or  containing  property 
insured  by  this  policy,  or  exposing  property  insured  hereby,  without 
written  permission  hereon,  is  prohibited. 


RESIDENCE    PROPERTY  229 


(f)  The  use  of  any  incubator  or  brooder  in  or  within  fifty 
feet  of  any  building  described  in  this  policy  without  permission 
endorsed  hereon  is  prohibited. 

(g)  If  harness  and  (or)  robes  are  insured  hereunder,  this 
policy  shall  extend  to  cover  same  while  contained  in  the  dwelling, 
under  item  of  policy  covering  such  property. 

(h)  Pro-rata  Distribution  Clause,  applying  to  items  16  and  17. 
It  is  a  condition  of  this  contract  that  the  amounts  insured  under 
each  of  said  items  shall  attach  in  each  building,  shed  or  other 
structure  and  (or)  place  in  that  proportion  of  the  amounts  insured 
under  said  items  that  the  value  of  the  property  covered  by  this 
policy  in  each  building,  shed  and  other  structure  and  (or)  place 
shall  bear  to  the  value  of  all  the  property  described  in  said 
items  respectively. 

(i)  Permission  is  hereby  given  to  use  steam  as  a  motive  power 
for  threshing  grain,  subject  to  the  following  warranties  on  the 
part  of  the   assured: 

Warranties  : 

First. — When  there  is  a  fire  in  the  furnace  of  the  boiler,  it  shall 
not  be  located  nearer  than  twenty-five  feet  from  any  building  or 
stack  of  hay  or  straw,  nor  shall  any  litter  or  straw  be  allowed 
to  collect  or  remain  within  fifteen  feet  of  said  furnace  and  mineral 
coal,  or  wood  for  kindling,  only  shall  be  used  for  fuel. 

Second. — A  cap  or  screen,  in  perfect  order,  shall  cover  the 
smokestack  during  all  the  time  a  fire  is  in  the  furnace  and  all 
modern  means  used  for  safety  and  protection  shall  be  attached  to 
the  boiler  and  engine,  and  shall  be  in  good  condition. 

Third. — At  least  three  pails  of  water  shall  be  kept  within  ten 
feet  of  the  furnace,  while  there  is  any  fire  in  the  furnace. 

Fourth. — During  the  absence  of  the  persons  engaged  in  threshing, 
a  competent  watchman  shall  be  left  in  attendance  until  all  the 
fire  is   extinguished. 

(j)  Machines  of  all  kinds,  other  than  hand  power,  wool, 
tobacco,  hops,  poultry,  and  dressed  animals  must  be  insured  spe- 
cifically, not  being  covered  under  any  general  term. 

(Attach  Lightning  and  Three-quarter  Value  Clauses.) 

FARM  FORM  (West) 
(Illustration) 

FARM    PROPERTY    FIRE,    LIGHTNING   AND 
TORNADO  FORM 

(1)     $ On story roof Dwelling  House, 

including  foundations,  additions  now  and  hereafter  attached,  irre- 
movable fixtures,  plumbing,  heating  and  lighting  apparatus,  porches, 
storm  doors  and  screens  while  therein  or  attached  thereto  or  while 
stored  in  any  buildings  on  the  premises. 


280  THE  AGENTS   KEY   TO   FIRE   INSURANCE 

(2)  $ On  Household  and  Kitchen  Furniture  and  Furnish- 
ings of  all  kinds,  useful  and  ornamental,  belonging  to  the  assured 
or  to  members  of  assured's  family,  including  family  wearing 
apparel  and  materials  for  same,  trunks,  handbags,  umbrellas, 
canes,  family  provisions  and  produce,  musical  instruments,  sheet 
music,  silver  plate  and  plated  ware,  watches,  clocks,  and  jewelry 
in  use;  also  printed  books,  pictures,  engravings  and  frames  (at 
not  exceeding  cost  price),  firearms  and  their  equipment,  lodge 
and  social  regalia,  fuel,  sewing  machine  and  iron  safe,  only  while 
contained  in  the  above-described  dwelling  house  and  in  the  summer 
kitchen  used  in  connection  therewith. 

(3)  $....0n 

(4)  $. . . . On  ; 

(5)  $....0n 

(6)  $ On    Smoke   and   Produce   House   marked   No 

on  diagram  on  application. 

(7)  $....On  Family  Provisions  and  Produce,  only  while  con- 
tained in  the  above-described  Smoke  and  Produce  House. 

(8)  $...,On  Barn  and  Sheds  attached,  including  foundations 
and  fixtures  therein  or  thereon,  marked  No.  1  on  diagram  on 
application. 

(9)  $....0n  Barn  and  Sheds  attached,  Including  foundations 
and  fixtures  therein  or  thereon,  marked  No.  2  on  diagram  on 
application. 

(10)  $ On  Barn  and  Sheds  attached,  including  foundations 

and  fixtures  therein  or  thereon,  marked  No.  3  on  diagram  on 
application. 

NOTE — Silos  (whether  attached  to  any  of  said  buildings  or  not) 
and  silage  are  not  covered  by  this  Policy  unless  they  are  insured 
specifically  under  separate  items. 

(11)  $ On  Granary  marked  No on  diagram  on  ap- 
plication. 

(12)  $ On  Crib  marked  No on  diagram  on  applica- 
tion. 

(13)  $ On roof Silo,   situated    (as   shown   on 

diagram  on   application)    as  follows: 

(14)  $....0n 

(15)  $....0n  

(16)  $ On  Grain  and  Seeds  of  all  kinds  while  in  dwelling, 

granaries,  barns  and  cribs,  and  against  fire  and  lightning  only 
on  grain  while  in  stacks,  shocks  or  sacks,  on  premises  herein 
described. 

(17)  $ On  Harness,  Saddles,  Robes,  Blankets,  Whips,  Car- 
riages, Buggies,  Sleighs,  Wagons,  including  hay  racks  and  all 
other  farm  vehicles  (excluding  steam  or  motor  driven  vehicles), 
while  on  or  temporarily  oflF  the  premises. 

(18)  $ On  Hay,  Straw,  Fodder,  Ground  Feed  and  all  kinds 

of  manufactured  stock  foods  (not  specified  under  Item  16  on  grain 


RESIDENCE    PROPERTY  231 

and  seeds  and  Item  20  on  silage),  while  in  barns  or  sheds,  on 
the  premises  herein  described. 

(19)  $ On  Mowers,  Reapers,  Harvesters,  Farm  Implements, 

Tools,  Cream  Separators,  Milk  Cans,  Empty  Sacks  and  Bags, 
Utensils  and  Farm  Machinery  (excluding  threshing  machines, 
windmills,  electric  motors,  gasolene,  kerosene  and  steam-power 
engines  and  machines),  on  or  temporarily  off  the  premises  herein 
described. 

(20)  $ On  Silage  while  in  silos  on  the  premises  herein  de- 
scribed. 

(21)  $....0n  

(22)  $ Against  fire  and  lightning  only    (no  premium  being 

charged  for  tornado)  on  Hay,  Straw  and  Fodder  in  stacks  on 
cultivated  ground  only,  on  the  premises  herein  described,  not 
exceeding  $100  on  any  one  stack  of  hay  or  $50  on  any  one  stack 
of  straw  or  fodder. 

(23)  $ On  Horses,  Mules  and  Colts. 

(24)  $....0n  Cattle. 

(25)  $....0n  Sheep. 

(26)  $....OnHogs. 

{21)     $. . .  .On  

No  insurance  attaches  under  any  of  the  above  items  unless  a 
definite  amount  is  specified  and  inserted  in  blank  immediately 
preceding  the  item. 

Any  insurance  under  this  policy  on  live  stock  (unless  otherwise 
provided)  is  extended  to  cover  while  on  or  temporarily  off  the 
premises  herein  described  except  while  in  transit  by  common 
carrier  or  in  public  stock  yards. 

In  no  case  (except  in  the  case  of  more  valuable  animals  insured 
specifically   by    names    and/or   numbers)    shall    any    one    horse   or 

mule  over  two  years  old  be  valued  at  more  than  $ ;  nor  more 

than  two-thirds  of  said  sum  if  under  two  years  old;  nor  for 
more  than  one-third  of  said  sum  if  under  one  year  old;  nor 
shall  any  one  head  of  cattle  over  two  years  old  be  valued  at 
more  than  $..,.;  nor  shall  any  one  head  of  cattle  under  two 
years  old  be  valued  at  more  than  one-half  of  said  sum;  nor  shall 
any  one  sheep  be  valued  at  more  than  $5.00;  nor  shall  any  one 
hog  be  valued  at  more  than  $20.00;  nor  in  any  case  for  more 
than  the  actual  cash  value  of  the  animal  of  any  class  destroyed 
or  damaged,  such  cash  value  in  no  event  to  exceed  the  valuations 
given  above. 

Said    property   being    owned    by   the    assured,    and    (except    as 

herein   otherwise   provided)    situated   on    and   confined   to 

acres  in  the of  Section Township Range 

County  of State  of 

Special  Permits  Applying  Only  to  Fire  and  Lightning  Coverage 

The  following  permits  are  hereby  granted  by  the  Company  and 
made  a  part  of  this  Policy,  to  wit: 


232  THE  AGENTS   KEY   TO  FIRE   INSURANCE 

To  Construct  Ordinary  Outbuildings. — Permission  to  make 
alterations,  repairs  and  additions  to  any  building  herein  described, 
and  the  insurance,  if  any,  on  such  building  is  hereby  extended 
and  made  to  cover  such  repairs  and  improvements,  subject  to  the 
conditions  of  this  Policy. 

Ninety  days'  permission  granted  to  complete  and  occupy  any 
new  building  insured  hereunder  in  process  of  construction  and 
this  policy  shall,  subject  to  its  other  conditions,  cover  such  building 
and  the  material  to  be  used  in  its  construction  while  on  the 
described  premises. 

Good  brick  flues  must  be  provided  in  all  buildings  in  which 
fires  are  to  be  used. 

Vacancy. — Permission  given  for  any  of  the  buildings  herein 
described  to  remain  vacant,  unoccupied  or  uninhabited  for  not 
exceeding  ten  consecutive  days. 

Electric  Light  Permit. — Permission  to  use  electric  lights  in  all 
buildings. 

Natural  Gas  Permit. — Permission  to  use  natural  gas  for  fuel 
and  light,  provided  this  Company  shall  not  be  liable  for  loss 
or  damage  caused  by  explosion  of  natural  gas  on  the  premises 
unless  fire  ensues,  and  then  for  loss  or  damage  by  fire  only. 

Kerosene  Permit. — Permission  to  use  kerosene  for  lighting,  heat- 
ing and  cooking  in  the  dwelling  house  and  summer  kitchen,  and 
for  use  in  closed  lanterns  for  lights  in  barns  and  outbuildings. 

Gasolene  and  Kerosene  Stove  Permit. — Permission  to  use  gaso- 
lene or  kerosene  stoves  in  the  dwelling  house  or  summer  kitchen. 

Gasolene  Gas  Permit. — Permission  to  use  a  gasolene  gas  lamp 
or  gasolene  gas  lighting  system  for  lights  in  the  dwelling  house 
or  summer  kitchen.  Gasolene  lamps  or  gasolene  lanterns  for 
lights  and  open  lights  in  barns  and  outbuildings  are  positively 
prohibited. 

Gasolene  Engine  Permit. — Permission  to  use  a  gasolene  engine 
for  power  purposes  on  the  premises. 

Automobile  Permit. — Permission  to  house  one  automobile  in 
barn  or  other  outbuilding,  provided  the  part  of  the  building  in 
which  the  automobile  is  stored  has  only  an  earth,  concrete  or  other 
incombustible  floor. 

Steam  Power  Permit. — Permission  to  use  steam  power  for  thresh- 
ing, shelling  corn  and  other  farm  work  outside  of  buildings. 

Incubator  and  Brooder  Permit. — Permission  to  use  chicken  in- 
cubators and  brooders  anywhere  on  the  premises  except  in  barns. 

Lightning  Clause. — Except  as  provided  in  the  Electrical  Exemp- 
tion or  Dynamo  Clause  below,  this  policy  shall  cover  any  direct 
loss  or  damage  caused  by  lightning  (meaning  thereby  the  com- 
monly accepted  use  of  the  term  lightning,  and  in  no  case  to 
include  loss  or  damage  by  cyclone,  tornado  or  windstorm),  not 
exceeding  the  sum  insured,  nor  the  interest  of  the  insured  in  the 


RESIDENCE    PROPERTY  233 

property,  and  subject  in  all  other  respects  to  the  terms  and  con- 
ditions of  this  policy.  Provided,  however,  if  there  shall  be  any 
other  insurance  on  said  property  this  company  shall  be  liable  only 
pro  rata  with  such  other  insurance  for  any  direct  loss  by  lightning, 
whether  such  other  insurance  be  against  direct  loss  by  lightning 
or  not. 

Electrical  Exemption  or.  Dynamo  Clause. — If  dynamos,  ex- 
citers, lamps,  motors,  switches  or  other  electrical  appliances  or 
devices  are  covered  under  this  policy,  this  company  shall  not  be 
liable  for  any  electrical  injury  or  disturbance,  whether  from 
artificial  or  natural  causes,  unless  fire  ensues,  and  then  only  for 
such  loss  or  damage  to  them  as  may  be  caused  by  such  ensuing 
fire;  this  limitation  to  be  operative  notwithstanding  any  provision 
to  the  contrary  in  the  lightning  clause  attached. 

Important 

Permission  for  the  use  of  GASOLENE  for  any  of  the  above 
mentioned  purposes  is  granted  upon  the  express  warranty  on 
the  part  of  the  assured  that  the  lamps,  reservoirs  or  holders  will 
be  filled  by  daylight  only,  and  when  no  artificial  light  is  burning 
in  the  same  room,  and  when  the  burners  or  lamps  are  not  lighted; 
and  further,  that  no  gasolene  except  that  contained  in  said  lamps, 
reservoirs  or  holders  shall  be  kept  or  stored  within  fifteen  (15) 
feet  of  any  of  the  buildings  herein  described. 

Cyclone,  Tornado,  or  Windstorm  Clause. — In  consideration 
of  a  part  of  the  premium  herein  named  this  policy  also  covers 
all   direct   loss   or  damage   by   Cyclone,   Tornado,   or   Windstorm, 

except   as    herein   provided,   to   an   amount  not   exceeding 

Dollars  to  the  property  herein  described  and  in  the  manner  speci- 
fied, subject  to  the  terms  and  conditions  of  this  policy.  Provided, 
however,  if  there  be  other  valid  insurance  on  such  property  against 
direct  loss  by  Cyclone,  Tornado,  or  Windstorm,  this  Company 
shall  be  liable  only  pro  rata  with  such  other  valid  and  collectible 
insurance  for  any  such  loss  by  Cyclone,  Tornado,  or  Windstorm. 

This  Company  Will  Not  Be  Liable  for  Any  Cyclone,  Tor- 
nado, OR  WindstoRxM  loss  or  damage  to  buildings  (or  their  con- 
tents) in  course  of  construction  or  re-construction  unless  same  are 
entirely  enclosed  and  under  roof,  with  all  doors  and  windows 
permanently  in  place;  nor  to  buildings  covered,  in  whole  or  in 
part,  with  hay,  straw,  thatched  or  board  roofs;  nor  to  open  sheds; 
nor  for  the  blowing  down  of  loose  clap-boards,  eave-troughs  or 
spouts,  weather-vanes,  lightning-rods,  old  and  defective  flues  and 
shingles,  metal  smoke-stacks  and  window-blinds;  nor  for  wind- 
mills or  dilapidated  buildings.  It  is  further  understood  and 
agreed  that  this  insurance  does  not  cover  any  loss  or  damage  from 
cloud-burst,  flood  or  overflow,  cold  weather  or  blizzard;  nor 
from  hail,  rain  or  snow  (whether  driven  by  wind  or  not)  ;  nor 
to  hay  or  grain  in  stacks  or  loose  in  fields;  nor  for  loss  or 
damage  to  live  stock  caused  by  freezing  in  blizzards,  or  snow- 
storms, or  by  blowing  down  of  trees,  hay  or  straw  stacks. 


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336  THE  AGENTS   KEY   TO   FIRE  INSURANCE 

WHEAT  AND   STRAW  ON   FARM— VIRGINIA 
(S.  E.  U.  A.) 

$ On  wheat  and  straw,  covering  in  straw  and  garner;   all 

while  contained  in  stack,  'barn,  shock,  granary,  or  elsewhere  on 
assured's  farm,  situate  about 

Attach  O.  I.  P.;  Full  Coinsurance,  Lightning  and  Steam  Thresh- 
ing clauses. 

FARM  AND  GRAIN  FORM 

{Uniformity  West) 
(For  Use  on  Either  Fire  or  Tornado  Policies) 

On  grain  and  seeds  of  all  kinds  (including  sacks  and  bags), 
cut  and  uncut  (but  not  including  straw  or  stubble),  threshed  or 
unthreshed,  shelled  or  unshelled,  in  shocks,  stacks  and  ricks  on 
cultivated  land,  in  dwelling  house,  barns,  bins,  tanks,  granaries  and 
cribs,  all  while  situated  as  follows: 

$ ....  On y^  Section Township Range 

County  of State  of 

$ ....  On ^  Section Township Range 

County  of State  of 

$ On ]/4  Section Township Range 

County  of State  of 

$. . .  .On ^  Section Township Range 

County  of State  of 

This  insurance  shall  attach  in  each  building,  division,  stack, 
rick  or  location  in  such  proportion  as  the  value  in  each  building, 
division,  stack,  rick  or  location  bears  to  the  aggregate  value  of 
the  subject  insured. 

It  is  hereby  agreed  and  understood  that  any  insurance  covering 
against  Tornadoes,  Cyclones  and  Windstorms,  covers  grain  and 
seeds  as  above  specifically  described  only  while  in  buildings  on 
premises  mentioned  and  in  no  event  upon  grain  and  seeds  in  the 
field  or  in  stacks,  ricks  and  shocks. 

Loss,  if  any,  to  be  adjusted  with  assured  and  payable  to 

Mortgagee 

Permission  granted  to  use  Steam  or  Gasoline  as  a  Motive  Power 
for  Thrashing  Grain. 

Value   of  Grain,   $ Amount   of  Additional   Insurance,   Fire, 

$ Tornado,  $.  . .  .Amount  of  Mortgage,  $ 


DIVISION  IV 

CHURCHES,  SCHOOLS,  COLLEGES  AND 
PUBLIC  BUILDINGS 

Policies  on  this  class  of  property  usually  cover,  separately, 
the  building,  and  the  contents  thereof,  and  contain  the  follow- 
ing permits  and  clauses,  worded  in  accordance  with  local 
rules : 

Other  Insurance,  Lightning,  Dynamo,  Electric  Lighting  or 
other  Lighting  that  may  be  required,  Kerosene  Oil  Stove, 
Mechanics,  and  sometimes  the  Work  and  Materials;  also 
Vacancy  or  Unoccupancy  as  permitted,  together  with  such 
other  clauses  as  may  be  necessary  or  desirable,  or  as  may  be 
required  by  local  underwriting  rules.  (See  also  Special 
Agreements.) 

No  special  permit  is  necessary  for  holding  entertainments 
(although  frequently  granted)  unless  special  apparatus  is 
used,  such  as  motion  picture  machines  or  other  apparatus  that 
might  be  held  to  increase  the  hazard.  The  insurance  of  these 
classes  of  property  as  such  is  notice  to  the  companies  of  their 
uses  for  the  customary  purposes  and  activities. 

The  rules  of  the  various  associations  differ  regarding  the 
fixtures  that  may  be  included  with  the  building,  and  these 
should  be  referred  to  before  preparing  the  form. 

CHURCH,  CHAPEL  OR  SUNDAY  SCHOOL 

{Neiv  York) 

$....0n  the building,  occupied  for  church pur- 
poses,   situate ,    but    excluding    cost    of    excavations    and 

foundations  of  building  below  the  level  of  the  ground.  (This 
may  be  omitted  if  desired.) 

This  item  covers  all  adjoining  additions  and  extensions  thereto 
if  communicating,  sidewalks,  yard  fixtures,  fences,  railings,  pews, 
pulpits,  altars,  confessionals,  window  plate  and  ornamental  glass, 
frescoing  and  plain  and  ornamental  painting,  steam,  gas  and 
water  pipes,  heating  apparatus  and  fixtures  and  all  appliances 
pertaining  thereto,  dynamos  and  all  electrical  and  mechanical 
apparatus  and  appurtenances,  bells,  tower  clocks,  ventilating 
apparatus   and   all    permanent  fixtures. 

$....On  the  church,  altar,  school  and  other  movable  furniture, 
useful  and  ornamental,  carpets,  floor  coverings,  paintings,  pictures 
and  engravings  and  their  frames,  musical  instruments    (excepting 

237 


238  THE  AGENTS   KEY   TO   FIRE   INSURANCE  { 

i 

pipe    organs),    statuary,    stations,    vestments,    plate,    printed    books  ^ 
and  music,  church   and  school   paraphernalia   and  supplies.  ' 

$ On  pipe  organ  and  motors  and  all  connections  and  attach- >■ 

ments   thereto — all   while   contained  in    above    described   premises.  \ 

Permission  to  hold  fairs,  dramatic  and  literary  entertainments, , 
musical  concerts,  games  or  amusements  of  any  kind  (excluding] 
motion  picture  exhibitions)   in  said  building.  j 

Privilege   granted   to  use   steam,   hot   air   furnaces   or  grates  f or  ^ 
heating;  to  use  gas  or  kerosene  oil  for  lighting,  heating  or  cooking; 
to  be  unoccupied  a  portion  of  each  year. 

(Attach  usual  clauses.) 

CHURCH   FORM 

{S.  E.   U.  A.) 

$.  .  .  .On  the Church  Edifice,  with roof,  including 

chapel  and  parish  house  adjoining  and  communicating,  tower, 
foundations,  stained  and  leaded  glass  windows  (when  not  spe- 
cifically insured),  pews,  carvings,  inscriptions,  tablets,  plumbing,! 
gas,  water,  steam  and  ventilating  pipes,  stationary  heating  andjt 
lighting  apparatus,  boilers  and  their  connections,  electric  wiring,! 
chandeliers,  gas  and  electric  fixtures,  and  all  other  appurtenances! 
and  permanent  fixtures  therein  and  thereon,  while  occupied  as  al 
place  of  public  worship,  and  known  as j1 

$ On  Pipe  Organ,  including  water  and/or  electric  motor,] 

and   all    appurtenances,   connections    and    attachments   thereto;    allj 
only  while  contained  in  said  church  edifice. 

$ On    Furniture    and    Fixtures,    useful    and    ornamental, 

consisting  principally  of  church,  chancel  and  choir  furniture,  altar,| 
pulpit,  chancel-rail,  font,  vestments,  altar  and  chancel  hangings,] 
banners,  plate,  musical  instruments  (when  not  specifically  insured), j 
printed  books,  printed  music,  maps,  paintings,  engravings,  picturesi 
and  their  frames  (in  case  of  loss  or  damage  no  one  painting,^ 
engraving  or  picture  shall  be  valued  at  more  than  the  actual  costf 
of  same),  chairs,  whether  attached  to  building  or  not,  platformsi 
containing  the  same,  gas  stove,  crockery  and  other  kitchen  fur- 
nishings and  fuel;  all  only  while  contained  in  the  above  described] 
building,  situate 

(Attach  usual  clauses.) 

CHURCH   FORM 

(For  Use  on  Either  Fire  or  Tornado  Policies) 
{Uniformity  West) 

*1  $. . .  .On    the story roof building,    witht 

spire   or  tower  rising   about feet   above  peak  of  roof   andl 

about feet  above  ground,  including  foundations,  plumbing, 

electric   wiring    and    stationary    heating,    lighting    and   ventilatingi 


CHURCHES,   SCHOOLS   AND  PUBLIC  BUILDINGS         239 

apparatus  and  fixtures  therein;  also  all  permanent  fixtures  (ex- 
cluding organ  with  operating  motor),  including  clocks,  bells,  fixed 
seats,  railings,  altars  and  stained  glass  windows,  belonging  to 
and  constituting  a  part  of  said  building;  only  while  occupied  for 
church  purposes,   and   situated 

*2  $....0n  organ  with  operating  motor,  only  while  contained 
in  the  above  described  building. 

*3  $ On  church  furniture  and  fixtures,  useful  and  orna- 
mental; pianos  and  other  musical  instruments  (excluding  organ 
with  operating  motor)  ;  pictures,  paintings,  engravings,  including 
their  frames,  statuary  and  sculpture,  all  at  not  exceeding  cost; 
vestment?,  fonts,  altar  vessels,  printed  church  and  Sunday-school 
books;  movable  heating  apparatus  and  fuel;  and  all  other  furniture 
and  fixtures  not  belonging  to  and  constituting  a  permanent  part 
of  the  building;  all  only  while  contained  in  the  above  described 
building. 

*4  $ On    

*No  insurance  attaches  under  any  of  the  above  items  unless  a 
certain  amount  is  specified  and  inserted  in  blank  immediately 
preceding  the  item. 

The  use  of  MOVING  PICTURE  MACHINES  is  prohibited 
(under  fire  policies)    unless  special  permit  is  endorsed  hereon, 

(Attach  usual  clauses.) 

CHURCH  (CATHOLIC)  AND  PAROCHIAL  SCHOOL 
FORM   (Illustration) 

$ On  the building,  occupied  for  church pur- 
poses, situate 

This  item  covers  additions  and  extensions  adjoining  and  com- 
municating, railings,  pews,  pulpits,  altars,  confessionals,  fixed 
stations,  windows,  plate  glass,  frescoes  and  decorations,  gas,  water 
heating,  lighting  and  ventilating  pipes,  fixtures  and  apparatus,  and 
appliances  pertaining  thereto,  bells   and  tower  clocks. 

$....0n  pipe  organs,  including  all  water  motors,  dynamos, 
electrical  or  mechanical  apparatus  and  appurtenances  thereto, 
while  contained  in  the  above  described  building. 

$....0n  church,  altar,  school  and  other  movable  furniture,  not 
I  covered  under  the  building  or  organ  insurance,  including  pictures, 
paintings,  engravings  and  their  frames;  musical  instruments  (ex- 
cept pipe  organs),  printed  books  and  music,  statuary,  costumes  and 
restments,  scenery,  awnings,  fuel  and  stores,  and  all  other  similar 
property,  while  contained  in  the  above  described  building. 

Permission  granted  for  other  insurance,  to  hold  fairs,  concerts, 
literary  and  dramatic  entertainments,  and  to  be  unoccupied  during 
the  customary  periods. 

Attach  Lightning  and  Dynamo  Clauses,  Electric  Light  permit, 
I  Mechanics  permit,  and  others  needed  or  required. 

NOTE: — If  used  for  insuring  school  property  insert  "and/or 
school"  after  the  word  "church"  in  first  line. 


240-  THE  AGENTS   KEY   TO   FIRE   INSURANCE 


SCHOOL  BUILDING  AND   CONTENTS  FORM 

{Neiv  York)  \ 

$....On  the building,  occupied  for  school  purposes,  and; 

known  as situate but  excluding  cost  of  excavations  \ 

and  foundations  of  building  below  the  level  of  the  ground. 

This  item  covers  all  adjoining  additions  and  extensions  thereto  , 
if  communicating,  and  all  permanent  fixtures  therein,  thereon  and  i 
belonging  thereto,  including  steam,  gas  and  water  pipes,  plumbing,  ; 
heating,  lighting,  ventilating  and  electrical  apparatus  and  ap-  j 
purtenances,  awnings,  fences,  railings,  sidewalks  and  yard  fixtures.  ■ 

$....0n  school  and  other  movable  furniture,  useful  and  orna-  i 
mental,  carpets,  floor  covering,  paintings,  pictures,  engravings  ! 
and  their  frames,  musical  instruments,  statuary  and  other  works  | 
of  art,  articles  of  virtu,  printed  books  and  music,  school  parapher-  i 
nalia  and  supplies,  fire  extinguishers,  hose  together  with  spare  parts  i 
and  attachments  to  same,  scientific  cabinets  and  collections,  labora-  j 
tory  apparatus  and  chemicals,  maps,  diagrams,  models,  stationery,  1 
blank  books,  and  typewriters  and  appurtenances,  while  contained  in  ! 
above-described  building.  | 

Permission  to  hold  fairs,   dramatic  and  literary  entertainments,  j 
musical    concerts,   games   or    amusements   of    any   kind    (excluding 
motion  picture  exhibitions)  in  said  building.  | 

(Attach  usual  clauses.)  \ 

SCHOOL  FORM 

(For  Use  on  Either  Fire  or  Tornado  Policies)  \ 

{Uniformity  West)  \ 

*1  $ ....  On  the story roof school  building,  i| 

including  foundations,  plumbing,  electric  wiring  and  stationary  ^ 
heating,  lighting  and  ventilating  apparatus  and  fixtures  therein;  -i 
also  all  permanent  fixtures  (excluding  organ  with  operating  motor), 
including  fixed  seats,  desks,  railings,  altars,  clocks,  bells  and 
stained  glass  windows,  belonging  to  and  constituting  a  part  of 
said  building;  only  while  occupied  for  school  purposes,  with 
privilege  of  occasional   public  meetings,   and  situated 

This  insurance  shall  also  cover  under  this  item,  if  the  property 
of  owner  of  building,  door  and  window  screens  and  storm  doors^ 
and  windows,  belonging  to  above  described  building,  while  at- 
tached thereto  or  stored  therein. 

*2  $....0n  organ  with  operating  motor,  only  while  contained  in-; 
the  above  described  building.  •- 

*3  $ On  movable  furniture  and  fixtures  of  every  description,  { 

useful  and  ornamental ;  maps,  library  and  supply  of  books  and  | 
stationery;  mirrors,  pictures,  paintings,  engravings,  including  their  t 
frames,  statuary  and  sculpture,  all  at  not  exceeding  cost;  labora-^ 
tory  supplies  and  equipment;  scientific  supplies  and  equipment;  J 
manual   training  machinery,  supplies   and  equipment;   gymnasiums 


CHURCHES,  SCHOOLS  AND  PUBLIC  BUILDINGS         241 

supplies  and  equipment;  piano  and  other  musical  instruments  (ex- 
cluding organ  with  operating  motor)  ;  stage  scenery  and  equip- 
ment; movable  heating  apparatus,  electrical  apparatus,  appliances 
and  devices;  fuel  and  provisions;  and  all  other  articles  and 
apparatus  as  are  usually  contained  in  school  buildings;  all  not 
belonging  to  and  constituting  a  permanent  part  of  the  building 
and  only  while  contained  in  the  above  described  building. 

*4  $....0n   : 

*No  insurance  attaches  under  any  of  the  above  items  unless  a 
certain  amount  is  specified  and  inserted  in  blank  immediately 
preceding  the  item. 

The  use  of  MOVING  PICTURE  MACHINES  is  prohibited 
(under    fire    policies)    unless    special    permit    is    endorsed    hereon. 

(Attach  usual   clauses.) 

SCHOOL  FORM  FOR  INSURING  ALL  SCHOOLS  OF 
A  CITY  (Illustration)    ' 

$. . .  .On  school  properties  of  the  City  of ,  as  hereinafter 

described  and  specified. 

Building. — The  term  "building"  shall  include  additions  and  ex- 
tensions adjoining  and  communicating,  platforms,  bridges  and  fire 
escapes;  plate  glass,  frescoes  and  decorations;  heating,  lighting, 
ventilating,  pumping,  plumbing,  elevating  and  water  fixtures  and 
equipment,  and  all  permanent  fixtures  when  a  part  of  the  realty; 
outbuildings,  fences  and  yard  fixtures  pertaining  thereto. 

Contents. — The  term  "contents"  shall  include  furniture  and  fix- 
tures consisting  principally  of  desks,  chairs,  benches,  musical  in- 
struments, the  articles  enumerated  in  the  policy  on  which  liability 
must  be  specifically  assumed,  and  all  other  school,  gymnasium, 
laboratory  and  manual  training  furniture,  equipment,  materials 
and  supplies,  and  other  property  not  covered  under  the  building 
item  while  contained  in  or  on  building. 

It  is  understood  and  agreed  that  the  amounts  stated  in  the 
following  schedule  under  the  item  "building,"  and/or  the  item 
"contents"  shall  attach  in  accordance  with  the  form  as  given  under 
those  respective  headings,  and  that  the  amount  of  insurance  is 
divided  and  applies  as  shown  in  the  following  schedule,  viz.: 

Item        Name  and  Location  Building     Contents      Total 

L     Central,  Main  and  High  Sts. .  .$60,000        $15,000        $75,000 

2.  Boys'  High,  Palmer  and  Green 

Sts 65,000  18,000  83,000 

3.  Girls'  High,  Park  &  Broad  Sts..  90,000  22,000         112,000 

4.  Manual  Training,  645  Wood  St.  25,000  17,000  42,000 


Totals    $240,000        $72,000      $312,000 

It  is  understood  that  bridges,  passageways   and   platforms  that 
connect  buildings  are  insured  with  each  building  to  the  midway 


242  THE  AGENTS   KEY  TO  FIRE  INSURANCE     '  ; 

I 
point  and  that  foundations  of  buildings,  of  boilers,  of  engines  and  ■ 
of  fixed  machinery,  below  the  lowest  ground  level  are  not  cov-  ' 
ered  under  this  policy.  ■ 

Permission  granted  to  remain  closed  on  holidays,  during  the! 
customary  vacation  periods  and  whenever  considered  advisable] 
by  the  school  authorities.  ' 

(Attach  usual  clauses.)  j 

NOTE : — This  form  may  also  be  used  for  insuring  private  ] 
schools.  : 

I 
COLLEGE  OR  UNIVERSITY  FORM  1 

(Illustration)  < 

$ Being   a    pro   rata   part   of   each   of   the   following   specific! 

amounts  of  insurance,  on  property  located  on  the  premises  of  the  . 
assured,  situate i 

Item..         Property                             Building  Contents  Total    j 

1.  North   Building    $120,000  $30,000  $150,000  i 

2.  East    Building    45,000  12,000  57,000  • 

3.  South   Building    67,000  22,000  89,000  \ 

4.  Memorial    Hall    86,000  78,000  164,000  I 

,  j 

Totals    $318,000         $142,000         $460,000  i 

It  is  understood  and  agreed  that  the  insurance  on  buildings  covers 
on  buildings  and  structures,  their  attachments,  additions,  exten-  j 
sions,  appurtenances  and  improvements,  therein  or  thereon,  whether  ] 
adjoining  or  communicating;  also  on  all  permanent  fixtures,  such  as  ; 
permanent  stacks  and  chimneys,  cupboards,  elevators  and  all  con- 
nections, appurtenances,  attachments,  illuminating  and  signal  sys- 
tems, wiring,  lamps,  lighting,  fixtures,  power  machinery  and  mo- 
tors, pumps,  pipes  and  fittings,  plumbing  work  and  fixtures,  heat- 
ing, lighting,  ventilating  and  cleaning  apparatus,  memorial  win- 
dows, storm  doors  and  windows,  screens,  fire  escapes,  awnings, 
plate,  stained  and  ornamental  glass,  fresco  work  and  decorations, 
fixed  mirrors  and  their  frames,  bookcases  and  all  other  furniture 
set  or  built  in  walls,  forming  a  part  of  the  buildings,  and  on  desks, 
pews,  seats,  chairs,  cases,  racks,  shelving  attached  to  the  walls, 
floors  or  ceilings;  tanks  and  connections  on  or  in  buildings,  orj 
within  100  feet  thereof.  T 

It  is  understood  and  agreed  that  the  insurance  on  the  contents|i 
covers  on  furniture  and  fixtures,  useful  and  ornamental,  rugs, - 
carpets,  pictures,  paintings,  engravings,  and  their  frames,  at  not  . 
exceeding  cost,  mirrors,  china,  glass  and  crockery  ware,  fuel,  / 
scientific  instruments,  apparatus,  appurtenances,  tools  and  appli- 
ances, art  and  scientific  collections,  bric-a-brac,  bronzes  and  statu- 
ary, photographic  outfits,  dynamos,  motors,  electrical  and  other  j 
machinery  and  apparatus,  printing  and  book  binding  equipment,  j 
books,   manuscripts    and    all    other    articles    and    apparatus    neces-  j 

i 


CHURCHES,   SCHOOLS  AND  PUELTC  BUILDINGS         243 

sary  or  usual  in  the  conduct  and  maintenance  of  a  University,  in- 
cluding materials  and  supplies. 

Items  excluded. — Cost  of  excavations,  filling,  grading  and  foun- 
dations of  buildings  and  foundations  and  settings  of  machinery 
below  the  level  of  the  ground  are  not  covered  by  this  policy. 

Permission  granted  to  remain  closed  on  holidays  and  unoccupied 
during  the  customary  vacation  periods  and  whenever  considered 
advisable  by  the  University  authorities;  to  do  such  work  and  use 
such  materials  as  are  customary  or  incidental  to  University  prop- 
erties. 

(Attach  usual  clauses.) 

PUBLIC   BUILDING   FORM 
(Illustration) 

$ On  the story roof building,  includ- 
ing additions  and  extensions  adjoining  and  communicating  unless 
specifically  insured,  screens,  awnings,  and  apparatus  and  fixtures 
for  heating,  lighting,  ventilating,  or  other  service  of  the  building; 
outbuildings,  yard  fixtures,  fences  and  flag  poles  pertaining  thereto, 
while  occupied  for purposes,  situate 

$ On   furniture    and   fixtures  consisting  principally   of   desks, 

benches,  chairs,  the  articles  enumerated  in  the  policy  on  which 
liability  must  be  specifically  assumed,  and  other  furniture,  equip- 
ment, materials  and  supplies,  while  contained  in  the  building  de- 
scribed above.  This  item  shall  not  cover  any  property  that  is 
enumerated  or  covered  under  the  building,  nor  records,  books  of 
account  or  labor  performed  thereon. 

It  is  understood  that  bridges,  passage-ways  and  platforms  that 
connect  buildings  are  insured  under  the  building  item  to  a  mid- 
way point. 

Attach  clauses  for  Other  Insurance,  Lightning  and  Dynamo, 
Kerosene  Oil  Stoves,  Mechanics  Permit,  Work  and  Materials,  and 
Unoccupancy  during  customary  periods.  Also  other  clauses  de- 
sirable or  required  by  conditions  or  local  underwriting  rules. 

If  coinsurance  is  used  exclude  foundations,  etc. 

NOTE: — When  a  form  is  desired  for  making  a  schedule  of  all 
municipal  buildings,  use  one  modeled  after  the  school  schedule. 

PUBLIC  RECORDS  FORM 

$ On   abstracts,   records   of  title,  maps,   and  such  other  title 

records  and  references,  or  other  records,  as  constitute  the  public 
records  of ,  while  contained  in,  etc. 

In  the  event  of  loss,  no  claim  shall  be  made  in  excess  of  the 
amount  of  the  actual  cost  of  the  labor  required  to  reproduce  the 
damaged  property,  and  the  blank  books  and  stationery  upon  which 
the  said  records  are  reproduced. 

(Attach  usual  or  required  clauses.) 


244  THE  AGENTS   KEY   TO  FIRE  INSURANCE  j 

PUBLIC  LIBRARY   FORM  j 

(May  also  be  used  for  an  extensive  private  library)  j 

$ On  library  of  books,  pamphlets,  manuscripts,  papers,  raaga-| 

zines,  and  other  reading  matter,  bound  or  unbound,  but  not  to] 
cover  such  property  if  more  specifically  insured,  and  1 

$....0n  furniture  and  fixtures,  book-cases,  shelving,  catalog; 
and  card  index  cases,  stationery,  ornaments,  pictures,  paintings; 
and  engravings  and  their  frames,  and  all  other  equipment  ( whether  j 
required  by  the  policy  to  be  specifically  mentioned  or  not)  per-; 
taining  to  a  library,  and  ] 

$ On   card   indices,    at   an    agreed   valuation   of cents^ 

per  card  (or  per  volume).  i 

All  while  contained,  etc.  ! 

I 
(Attach  usual   or  required  clauses.)  J 

NOTE: — Value  of  card  indices  range  from  five  to  fifteen  centsi 
per  volume   according  to  the  magnitude  of  the  index  work.  \ 

Sometimes  card  indices  are  insured  with  the  following  pro-j 
visions:  "It  is  agreed  that  the  amount  of  loss  on  card  indicesi 
shall  be  limited  to  the  actual  cost  of  rewriting  and/or  reproducing^ 

cards,   but   in   no   case   to   exceed cents   per   card    (or   per^ 

volume).  . 

If  there  are  some  rare  books  or  manuscripts  which  it  is  desired 
to  insure  at  a  stated  value,  a  schedule  may  be  prepared  similarij 
in  form  to  a  painting  schedule,  naming  each  article  and  its  valuei 
so  that  it  may  be  identified.  ,; 


; 


DIVISION  V       • 

MERCANTILE  BUILDINGS   AND   THEIR 

CONTENTS 

(Also  Mercantile  and  Office  Buildings) 

Insurance  on  this  class  of  property  usually  covers  sepa- 
ately,  the  building,  the  store  or  office  furniture  and  fixtures, 
and  the  stock. 

Policies  covering  mercantile  property  usually  contain  the 
following  permits  and  clauses,  worded  in  accordance  with 
local  rules : 

Other  Insurance,  Lightning,  Dynamo,  Electric  or  other 
Lighting  that  may  be  required,  Kerosene  Oil  Stove,  Me- 
chanics, Work  and  Materials;  also  Powder  and  Kerosene  Oil 
for  sale  and  Vacancy  or  Unoccupancy,  as  permitted,  together 
with  such  other  clauses  as  may  be  necessary  or  desirable,  or 
as  may  be  required  by  local  underwriting  rules.  If  occupied 
in  part  for  dwelling  purposes,  permit  should  be  given  for 
benzine  or  gasoline  for  household  use.  (See  also  Special 
Agreements.) 

The  forms  given  are  intended  for  use  in  insuring  any  kind 
of  mercantile  building,  office  building,  store  or  office  furniture 
and  fixtures,  or  any  kind  of  mercantile  stock,  whether  whole- 
sale or  retail,  and  of  whatever  class;  some,  however,  may  re- 
quire additional  or  special  wording  or  cover  to  fit  specific 
needs;  the  permits  to  be  attached  may  differ  somewhat,  like- 
wise the  clauses  or  conditions  required  by  local  underwriting 
rules. 

MERCANTILE  BUILDING  AND  FIXTURE  FORM 
(Illustration) 

$. . .  .On  the building  occupied  as including  addi- 
tions, adjoining  and  communicating,  foundations,  plumbing,  steam, 
gas  and  water  pipes;  lighting  and  heating  apparatus  and  all  per- 
manent fixtures,  including  counters  and  shelving  that  are  a  part 
of  the  realty;  plate  and  ornamental  glass  and  fresco  work;  also 
storm  doors  and  windows,  screens,  screen  doors  and  awnings, 
whether   in   position    or   stored    in    said    building,    situate 

$ On   store,   workroom    and   office   furniture    and   fixtures   of 

every  description,  including  partitions,  mirrors,  tools,  utensils  and 
apparatus,  floor  coverings,  shades,  stationery  and  advertising  mat- 
ter and  signs,  not  covered  under  the  building  item.  All  while 
contained  in  or  on  or  attached  to  the  above  described  building  and 
additions  adjoining  and  communicating. 

245 


246  THE  AGENTS   KEY  TO   FIRE  INSURANCE 

Privileges. — Permission  is  given: — For  existing  communications; 
for  present  and  other  occupancies  not  more  hazardous,  and  to  do 
such  work  and  use  such  materials  as  are  usual  in  such  occupancies; 
for  other  insurance  without  notice  until  required;  for  mechanics 
to  be  employed  for  ordinary  alterations  and  repairs  in  the  within 
described  premises,  but  this  shall  not  be  held  to  include  the  con- 
structing or  reconstructing  of  the  building  or  buildings,  or  addi- 
tions, or  the  enlargement  of  the  premises;  to  use  kerosene  oil 
stoves;  to  keep  for  sale  not  exceeding  25  barrels  of  kerosene  oil; 
to  be  vacant  not  exceeding or  unoccupied  not  exceeding 


(Add  usual  clauses.) 

MERCHANDISE    AND    FIXTURE    FORM 
(Illustration) 

$ On  stock  in  trade  consisting  principally  of including 

full  and  empty  packages,  boxes,  samples,  labels  and  supplies,  the 
property  of  the  insured;  and  on  the  interest  of  the  insured  in  and/ 
or  liability  for  similar  property  held  by  the  insured  on  storage, 
or   for   repairs,    or   otherwise,   belonging   in   whole   or    in   part   to 

others;    all    while    contained    in    or    on    the story 

roof building  and  additions  adjoining  and  communicating, 

or  in  show  windows,  show  cases,  or  on  sidewalks  around  the  prem- 
ises while  in  process  of  storage,  exhibition  and/or  delivery,  situate 


$ On    store,    workroom    and   office    furniture    and    fixtures   of 

every  description,  including  partitions,  mirrors,  tools,  utensils  and 
apparatus,  floor  coverings,  shades,  stationery  and  advertising  mat- 
ter and  signs;  and  on  awnings  and  water,  gas  and  electric  fixtures, 
providing  same  are  not  insured  with  the  building.  All  while  con- 
tained in  or  on  or  attached  to  the  above  described  buildings  and 
additions  adjoining  and  communicating. 

Privileges. — Permission  is  given: — For  existing  communications; 
for  present  and  other  occupancies  not  more  hazardous,  and  to  do 
such  work  and  use  such  materials  as  are  usual  in  such  occupancies; 
for  other  insurance  without  notice  until  required ;  for  mechanics 
to  be  employed  for  ordinary  alterations  and  repairs  in  the  within 
described  premises,  but  this  shall  not  be  held  to  include  the  con- 
structing or  reconstructing  of  the  building  or  buildings,  or  addi- 
tions, or  the  enlargement  of  the  premises;  to  use  kerosene  oil 
stoves;  to  keep  for  sale  not  exceeding  25  barrels  of  kerosene  oil. 

(Add  usual  clauses.) 

[NOTE :  The  foregoing  is  considered  by  the  author  as  one 
of  the  best  forms  in  use,  making  a  clear,  safe  contract  with 
a  proper  **in  trust"  clause.] 


MERCANTILE  &  OFFICE  BUILDINGS  &   CONTENTS      247 

MERCHANDISE    AND    FIXTURE    FORM 

{More  Elaborate) 

$....0n  merchandise  and  stock  in  all  stages,  including  samples, 
materials,  supplies,  boxes,  labels,  cases,  packages  and  tags,  the 
property  of  the  assured,  or  sold  but  not  delivered  or  removed,  and 
on  property  of  others,  held  on  storage  or  for  repairs  or  otherwise, 
for  which  the  assured  may  be  liable,  also  for  labor  performed  on 
same;  and 

$ On  store,  office,  workroom  and  other  furniture  and  fixtures 

of  every  description,  engines,  boilers,  setting,  machines  and  ma- 
chinery, refrigerators,  piping,  dynamos,  motors,  connections,  shaft- 
ing, belting,  pulleys,  counters,  shelving,  partitions,  show  cases  and 
figures  (inside  and  outside),  pictures,  paintings,  engravings  and 
their  frames,  clocks,  signs,  awnings,  mirrors,  carpets  and  other 
floor  covering,  shades,  stationery  and  office  supplies,  fuel,  type- 
writing machines,  telephones  and  connections,  gas  and  electric  fix- 
tures, heating  apparatus,  electric  wiring  and  moulding  covering 
the  same,  cameras,  lenses,  patterns,  moulds,  models,  matrices, 
drawings,  designs,  wood  cuts,  lithographic  plates  and  stones,  and 
engravings  thereon,  stereotypes,  half-tones,  dies,  solutions,  photo- 
graphic negatives,  advertising  and  other  printed  matter,  books, 
lettering,  and  iron  safes,  trunks,  tools,  implements,  scientific  and 
other  instruments,  apparatus,  utensils,  appliances,  and  appurte- 
nances (including  improvements  and  betterments  to  buildings  when 
buildings  are  not  owned  by  the  assured),  and  all  other  property 
not  heretofore  enumerated  or  otherwise  insured;  all  the  foregoing 
mentioned  being  the  property  of  the  assured  or  leased,  or  the 
property  of  others  for  which  the  assured  may  be  liable  or  re- 
sponsible; all  while  contained  in,  on  and  under  and  about  the 
buildings  and  additions  and  extensions  adjoining  and  communicat- 
ing, sidewalks  and  show  cases,  situate 

It  is  understood  that  where  the  buildings  above  described  are 
owned  by  the  assured  that  such  of  the  above  described  property 
as  may  be  enumerated  under  the  buiTding  policies  is  not  covered 
by  this  policy. 

(Add  usual  clauses.) 

MERCANTILE    BUILDING,    FIXTURES    AND    STOCK 

FORM 

(For  Use  on  Either  Fire  or  Tornado  Policies) 
{Uniformity  West) 
*1  $ On  the story roof building,  in- 
cluding foundations,  plumbing,  electric  wiring  and  stationary  heat- 
ing, lighting  and  ventilating  apparatus  and  fixtures  therein;  also 
all  permanent  fixtures,  stationary  scales  and  elevators,  belonging 
to  and  constituting  a  part  of  said  building;  occupied  as  a 
(state  kind  of  business) situated 


248  THE  AGENTS   KEY   TO   FIRE  INSURANCE 

This  insurance  shall  also  cover  under  this  item,  if  the  property 
of  owner  of  building,  door  and  window  screens  and  storm  doors 
and  windows,  belonging  to  the  above  described  building,  while 
attached  thereto  or  stored  therein. 

*2  $....0n  store  and  office  furniture  and  fixtures,  counters, 
shelving,  show  cases,  scales,  desks,  safes,  typewriters,  cash  registers ; 
pictures,  paintings  and  engravings,  including  their  frames,  all 
at  not  exceeding  cost;  electrical  apparatus,  appliances  and  devices; 
stoves,  signs  and  awnings  (signs  and  awnings  covered  under  fire 
policies  only)  ;  and  all  other  tools,  implements,  utensils,  printed 
books  and  supplies  incidental  to  the  business;  all  not  belonging 
to  and  constituting  a  permanent  part  of  the  building  and  only 
while  contained  in,  or  attached  to,  the  above  described  building. 

*3  $....0n   stock   of  merchandise   consisting   chiefly   of 

and    such    other    merchandise    as    is    usually    kept    for    sale    in 

state   kind   of   business stores;    and,    provided    the 

assured  is  legally  liable  therefor,  this  item  shall  also  cover  such 
merchandise  held  in  trust,  or  on  commission,  or  sold  but  not 
delivered;  all  only  while  contained  in  the  above  described  building. 
This  item  shall  also  cover  said  merchandise  within  one  hundred 
(100)  feet  of  the  above  described  building  while  on  sidewalks, 
streets,  alleys,  yards,  detached  platforms  and  in  or  on  vehicles 
or  railway  cars;  also  on  said  merchandise  while  on  platforms  in 
contract  with  above  described  building;  all  only  while  in  transit 
to  and  from  said  building. 

*No  insurance  attaches  under  any  of  the  above  items  unless  a 
certain  amount  is  specified  and  inserted  in  blank  immediately 
preceding  the  item. 

(Attach  usual  clauses.) 

BLANKET  FORM 

(Mercantile) 

$ On  all  property,  both  real  and  personal  (including  property 

specifically  enumerated  in  the  policy  on  which  liability  is  required 
to  be  specifically  assumed,  but  excluding  accounts,  bills,  currency, 
deeds,  evidences  of  debt,  money,  notes,  or  securities),  belonging  to 
the  insured,  or  in  which  the  insured  has  an  interest  to  the  extent 
of  such  interest,  or  for  which  the  insured  may  be  liable  at  the 
time  of  fire;  also  for  labor  performed  or  materials  expended  there- 
on. All  while  contained  on  his  premises,  occupied  principally  for 
purposes,  situate 

Attach  clauses  shown  under  "Special  Agreements"  numbered 
1,  2,  3,  4,  5,  6,  7  and  8;  also  Electric  or  other  Lighting  that  may 
be  required.  Mechanics,  and  Vacancy  and/or  Unoccupancy  as 
permitted,  together  with  such  other  clauses  as  may  be  necessary 
or  desirable,  or  as  may  be  required  by  local  rules. 

(See  also  Blanket  Policies.) 


MERCANTILE  &  OFFICE  BUILDINGS  &   CONTENTS      249 

COUNTRY    STORE    FORM 

(For  Use  on  Either  Fire  or  Tornado  Policies) 
{Uniformity  West) 

*1  $ On  the story roof building,  in- 
cluding foundations,  plumbing,  electric  wiring  and  stationary 
heating,  lighting  and  ventilating  apparatus  and  fixtures  therein; 
also  all  permanent  fixtures,  stationary  scales  and  elevators,  be- 
longing to  and  constituting  a  part  of  said  building;  occupied  by 
as    a (state   kind   of  business) situated 

This  insurance  shall  also  cover  under  this  item,  if  the  property 
of  owner  of  building,  door  and  window  screens  and  storm  doors 
and  windows,  belonging  to  the  above  described  building,  while 
attached  thereto  or  stored  therein. 

*2$....0n    stock   of  merchandise   consisting  chiefly   of 

and  such  other  merchandise  as  is  usually  kept  for  sale  in  country 
stores;  and,  provided  the  assured  is  legally  liable  therefor,  this 
item  shall  also  cover  such  merchandise  held  in  trust,  or  on  com- 
mission, or  sold  but  not  delivered;  all  only  while  contained  in  the 
above  described  building. 

This  item  shall  also  cover  said  merchandise  within  one  hundred 
(100)  feet  of  the  above  described  building  while  on  sidewalks, 
streets,  alleys,  yards,  detached  platforms  and  in  or  on  vehicles 
or  railway  cars;  also  on  said  merchandise  while  on  platforms  in 
contact  with  above  described  building;  all  only  while  in  transit 
to  and  from  said  building. 

*3  $ On    store    and    office    furniture    and    fixtures,    counters, 

shelving,  show  cases,  scales,  desks,  safes,  typewriters,  cash  registers; 
pictures,  paintings  and  engravings,  including  their  frames,  all 
at  not  exceeding  cost;  electrical  apparatus,  appliances  and  devices; 
stoves,  signs  and  awnings  (signs  and  awnings  covered  under  fire 
policies  only),  and  all  other  tools,  implements,  utensils,  printed 
books  and  supplies  incidental  to  the  business;  all  not  belonging 
to  and  constituting  a  permanent  part  of  the  building  and  only 
while  contained  in,  or  attached  to,  the   above  described  building. 

*No  insurance  attaches  under  any  of  the  above  items  unless  a 
certain  amount  is  specified  and  inserted  in  blank  immediately 
preceding  the  item. 

(Attach  usual  clauses.) 

JEWELER'S  STOCK  FORM 

$ On    stock,    merchandise,   materials    and    supplies    of    every 

description,  pertaining  to  their  business,  their  own,  or  similar 
property  in  which  they  have  an  interest  to  the  extent  of  such  in- 
terest,  or  for  which  they  may  be   liable   in  the   event  of  loss   or 

damage  by  fire,  while  contained  in  the building,  or  show 

cases  on  sidewalks  connected  therewith,  occupied  as  a ,  and 

situate 


250  THE  AGENTS   KEY   TO  FIRE  INSURANCE 

In  consideration  of  the  reduced  rate  at  which  this  policy  is 
issued,  the  insured  guarantees  to  keep  in  safes,  between  the  hours 

pf  6  P.  M.  and  8  A.  M.  of  each  day,  not  less  than per  cent. 

of  the  entire  value  of  the  property  insured  under  this  policy,  except 
that  during  the  month  of  December  the  guarantee  shall  extend 
from  7  P.  M.  to  8  A.  M.,  and  any  loss  or  damage  is  to  be  adjusted 
on  this  basis.  It  is  specially  agreed,  however,  that  privilege  is 
granted  for  stock  to  be  out  of  safes  until  10  P.  M.  for  not  ex- 
ceeding 12  nights  in  any  one  year  for  the  purpose  of  inventorying. 

(Add  usual  or  required  clauses.) 

PAWNBROKER'S   FORM 

$....0n  the  right  and  interest  of  the  assured  in  the  articles  and 
stock  of  merchandise,  hazardous  and  extra  hazardous  (merchan- 
dise in  fireproof  safes  excepted),  held  in  trust  or  in  pledge  by 
said  assured  as  pawnbrokers,  including  interest  accrued  thereon  as 
allowed  by  law. 

$ On  the  right  and  interest  of  the  assured  in  the  articles  and 

stock  of  merchandise,  hazardous  and  extra  hazardous,  in  fireproof 
safes  only,  held  in  trust  or  in  pledge  by  said  assured  as  pawn- 
brokers, including  interest  accrued  thereon  as  allowed  by  law. 

$ On  merchandise,  hazardous  and  extra  hazardous,  the  prop- 
erty solely  of  said  assured. 

$ On  furniture  and  fixtures  of  every  description  used  in  the 

business  of  the  assured  and  all  attachments  thereto,  tools,  imple- 
ments, utensils,  appurtenances,  fitments,  stands,  figures,  pumps, 
tanks,  store,  office  and  factory  furniture  and  fixtures,  awnings, 
safes,  partitions,  shelving,  counters,  carpets,  typewriters,  and  at- 
tachments, trunks,  benches,  printed  books  and  stationery,  office  and 
factory  supplies  and  signs,  all  while  contained  in  or  attached  to 
the building  occupied  as situate 

This  insurance  does  not  protect  the  interest  of  parties  whose 
goods  are  pledged  to  the  assured ;  nor  does  it  cover  the  excess  of 
the  amount  loaned,  with  its  lawful  accrued  interest,  upon  any 
article  above  the  sound  value  of  the  same  at  the  time  of  any  fire. 

Other  insurance  permitted  without  notice  until  required. 

PHOTOGRAPHER'S   FORM 

$ On  studio,  workroom  and  office  furnishings  and  fixtures  of 

all  kinds  (except  lenses,  cameras  and  appurtenances),  including 
partitions,  scenery  and  screens;  pictures  (not  stock)  and  mirrors, 
and  their  frames;  tools,  utensils,  apparatus  and  appurtenances; 
frames  used  and  intended  for  exhibition  purposes,  floor  coverings, 
shades,  awnings,  stationery,  catalogs,  advertising  matter  and  signs; 
also  show  cases  on  outside  of  building  or  on  sidewalk  immediately 
adjacent  to  building;  and 


MERCANTILE  &   OFFICE  BUILDINGS  &   CONTENTS      251 

$....0n  lenses  and  cameras,  and  their  appurtenances;   and 

$ On  stock,  including  plates,  films,  sensitized  paper,  mounts, 

and  pictures  finished  or  in  process;   also  negatives    (value  not  to 

exceed cents  each)  ; 

All   while  contained   in,   on   or   attached  to  the  building  situate 

This  policy  shall  be  held  to  cover,  under  the  respective  items, 
property  belonging  to  the  insured;  also  the  interest  of  the  insured 
in  and/or  liability  for  property  of  like  description  held  by  the 
insured,  whether  on  storage,  or  for  repairs,  or  otherwise,  and  be- 
longing in  whole  or  in  part  to  others. 

(Attach  usual  or  required  clauses.) 

ART  DEALER  OR  ART  GALLERY  FORM 

$ On    store,    workroom,    office    and    art    gallery    furnishings 

and  fixtures  of  every  description,  including  partitions,  mirrors  and 
their  frames,  tools,  utensils,  implements  and  apparatus,  frames 
used  for  exhibition  purposes,  floor  coverings,  shades,  awnings, 
stationery,  catalogs,  advertising  matter  and  signs;  and 

$....0n  stock  consisting  principally  of  pictures,  paintings,  en- 
gravings, drawings,  antiques, ,  jewels,  sculpture,  bronzes,  curios, 
bric-a-brac,  objects  of  virtu,  clocks,  china,  porcelain,  furniture,  rare 
books  and  manuscripts,  articles  of  art  and/or  ornament  and  other 
merchandise  pertaining  to  the  insured's  business  as  art  dealer 
(or,  "pertaining  to  an  art  gallery"),  but  this  item  shall  not  cover 
property  that  is  the  subject  of  more  specific  insurance;   and 

$ On  the  following  described  property,  it  being  agreed  that 

the  amount  stated  opposite  each  article  shall,  for  the  purpose  of 
this  insurance,  be  considered  the  value  thereof: 

$ On  portrait  in  oils,  "The  Bishop,"  by  Walter  Satterlee. 

$ On  picture,  "Dancing  Fauns,"  by  F.  Luis  Mora. 

$....On  a  Chippendale  chair  for  salon. 

(The  list  may  be  continued  as  desired.) 

All  while  contained  in,  etc. 

It  is  understood  and  agreed  that  any  floating  or  excess  insur- 
ance shall  not  be  held  as  contributing  insurance  with  this  policy. 

(Attach  usual  or  required  clauses.) 

OFFICE   BUILDING   FORM 

$....0n  the building,  occupied  for purposes,  in- 
cluding additions  and  extensions  adjoining  and  communicating, 
plumbing,  steam,  hot  water,  gas,  water,  or  other  piping;  lighting, 
heating,  ventilating,  elevating,  or  other  building  apparatus,  and 
all  other  permanent  fixtures  that  are  a  part  of  the  realty  and/or 
pertain  to  its  service  for  the  purposes  intended  as  above  described; 
plate  glass,   frescoes,   decorations,   signs   and   lettering,   flag   poles, 


252  THE  AGENTS  KEY  TO  FIRE  INSURANCE 

fences,  gratings  and  similar  appurtenances;  also  storm  doors  and 
windows,  screens,  screen  doors  and  awnings,  whether  in  position 
or  stored  in  said  building.     Situate 

This  policy  shall  also  cover  personal  property  of  the  following 
kinds  belonging  exclusively  to  the  insured  hereunder,  as  building 
landlord  and  not  as  tenant,  and  in  actual  use  solely  for  the  fur- 
nishings or  service  of  said  building,  viz.:  floor  coverings  of  public 
halls  and  stairs,  window  shades,  tools,  utensils,  fuel,  materials  and 
supplies  and  employees'  uniforms. 

(Add  usual  clauses.) 

OFFICE  CONTENTS  FORM 

$ On  the   furnishings,  fixtures,   apparatus   and   equipment   of 

the  insured's  office,  including  the  articles  mentioned  in  the  policy 
on   which    liability   is    required    to    be    specifically    assumed.      All 

while    contained    in,    on    or    attached    to    the building    and 

additions  and  extensions  adjoining  and  communicating,  occupied 
for purposes,  situate 

(Add  usual  clauses.) 

OFFICE  CONTENTS  FORM 

{More  Elaborate) 


$ On   office   furniture,   fixtures    and    equipment   of   every   de-  \ 

scription,  including  partitions,  divisions,  counters,  shelving,  show- 
cases, cabinets,  floor  coverings,  interior  telephones,  cash  carrying  I 
or  registering  systems,  movable  wiring  or  piping,  tools,  implements,  ( 
utensils,  office  machines,  stationery,  advertising  matter,  price  lists,  I 
postage,  supplies,  safes,  signs,  awnings,  screens  or  storm  sash  and  \ 
doors,  merchandise  samples  and  packages  for  or  containing  same,  j 
and  all  other  equipment,  apparatus  and  appurtenances  pertaining  to  . 
the  office  even  though  not  specifically  mentioned;   all  while  con-  ' 

tained   in,    on    or    attached   to   the building    and    additions  \ 

adjoining  and  communicating,  occupied  for purposes,  situ-  ; 

ate I 

(Add  usual  clauses.)  | 

TITLE  COMPANY  FORM  FOR  INSURING  RECORDS  ^ 

$ On   abstracts,   records   of  title,   maps,   and   such   other  title  j 

records  and  references  as  constitute  their  Title  Plant,  while  con-  ,; 

tained  in  a  so-called  fireproof  record  room  on  the floor  of  j 

the  building,  and  situate * 

$ On   property   as    above   described,   while   contained   in   the  ^ 

above  described  building  outside  of  fireproof  record  room  above  J 
referred  to.  I 

In  the  event  of  loss,  no  claim  is  to  be  made  in  excess  of  the 
amount  of  the  actual  cost  of  the  labor  required  to  reproduce  the   i 

I 
1 


MERCANTILE  &   OFFICE  BUILDINGS   &   CONTENTS      253  ; 

damaged  property,  and  the  blank  books  and  stationery  upon  which  ; 

the  said  records  are  reproduced.  \ 

FORM    FOR   INSURING   THE   RECORDS    OF   A   TAX  ; 

BOARD.  LAND  COMMISSION   OR  OTHER  i 

SIMILAR  BODY  ! 

$ On    manuscripts    and    maps    comprising    details    and    sura-  i 

marized  records  of  material  in  and  value  of  the  property  of  the 

,   completed   and   in   process   of  completion,   including  the  i 

value    of    all    work   performed    upon    and    in    preparation    of   the  J 

same   and  cost  of  surveys,   all   while  contained  in   the   brick   and  i 

stone  building,  situate I 

In  event  of  loss  no  claim  shall  be  made  for  value  in  excess  of 

the   actual   cost  of   reproducing  the   manuscripts   or   other    records  ! 
damaged  or  destroyed. 

COMMERCIAL  AGENCY  FORM  j 

$....0n  binders,  files,   cases,   portfolios,   drawers,   tables,   racks,  : 
or   other    receptacles,    together    with    their    contents,    said    contents 

consisting   of   records    and   reports   of   the    agency,   concerning   the  j 

business  standing  of  merchants  and  others.  ; 

It  is  understood  and  agreed  that  this  policy  does  not  cover  the  ■ 

cost  of  obtaining  the   information   contained   in   said    records   and  ' 

reports,  tut  shall  include  the  cost  of  reproducing  them  from  like  i 

records  and  reports  preserved  in  other  offices  of  the  agency.  1 

All  while  contained  in,  etc.  j 

(Attach  usual  or  required  clauses.)  ■ 

TELEPHONE  RISKS— (Contents)  j 

{S.  E.  U.  A.)  \ 
$....0n   telephone  contents,   consisting  chiefly  of  machines   and 

machinery  of  every  description,  appliances,  apparatus,  equipments,  i 

appurtenances,    spare    and    duplicate    parts,    stock,    materials    and  j 

supplies    of    all    kinds,    tools,    implements    and    utensils,    models,  i 

patterns,    dies,    drawings,    scientific    apparatus,    office    and    other  \ 

furniture  and  fixtures  of  every  description,  pictures,  safes,  awnings,  \ 
signs,  books  and  stationery  of  whatever  kind  or  description,  vehicles, 

horses  and  mules    (not  exceeding  $300  on  any  one  animal),  their  j 

own,  or  held  in  trust  or  on  commission,  or  sold  but  not  removed,  ■ 

or  on   storage  or  for  repairs,  or  leased  or  held  on  joint  account  i 

or   the   property  of   others   for  which  the   assured  may  be   liable,  ■, 

all   only  while  contained   in   or   on   or   attached  to,   and/or  on   or  ' 

under   the   sidewalks,   or   in   or   on   or    about   the   premises  of  the  ; 

story building,  with roof  and  extensions  or 

additions   thereto,    while    occupied    by as situated  ; 

No on  the side  of Street,  Block  No ,  ' 

in... i 


254  THE  AGENTS   KEY   TO   FIRE   INSURANCE 

'I'his  insurance  is  eflFected  subject  to  the  following  conditions, 
which  are  hereby  made  warranties  by  the  assured,  and  are 
accepted  as  parts  of  this  contract: 

It  is  understood  and  agreed  that  in  case  of  any  loss  or  damage 
by  fire,  the  assured  is  at  liberty  to  make  immediately  all  necessary 
repairs,  notice  of  sucb  loss  to  be  given  to  this  Company  without 
delay. 

Permission  for  other  insurance;  to  use  the  premises  as  at  present 
and  for  other  purposes  not  more  hazardous;  to  keep  and  use  all 
articles  and  materials  in  such  quantities  as  are  necessary  for 
their  business;  to  make  ordinary  additions,  alterations  and  repairs, 
the  same  to  be  covered  by  this  insurance;  to  run  at  all  hours 
and  to  cease  operations  for  ninety  days  without  notice;  to  use 
electricity,  natural  gas,  coal  and  kerosene  oil  for  lighting  and 
motive  power. 

This  policy  shall  not  be  invalidated  by  reason  of  any  mortgage 
or  bond  issue. 

Lightning  and  Dynamo  Clause. — This  policy  shall  cover  any 
direct  loss  or  damage  caused  by  lightning  (meaning  thereby  the 
commonly  accepted  use  of  the  term  "lightning"  and  in  no  case 
to  include  loss  or  damage  by  cyclone,  tornado  or  windstorm), 
not  exceeding  the  sum  insured  nor  the  interest  of  the  assured  in 
the  property,  and  subject  in  all  other  respects  to  the  terms  and 
lEonditions  of  this  policy.  Provided,  however,  that  if  there  shall 
be  any  other  insurance  on  said  property,  this  company  shall  be 
liable  only  pro  rata  with  such  other  insurance  for  any  direct 
loss  by  lightning,  whether  such  other  insurance  be  against  direct 
loss  by  lightning  or  not. 

This  policy  does  not  cover  any  loss  or  damage  to  dynamos, 
switch-boards  or  other  electrical  machinery,  apparatus  or  con- 
nections, caused  by  electric  currents,  whether  artificial  or  natural, 
unless  fire  ensues,  and  then  for  the  loss  by  fire  only. 

In  consideration  of  the  rate  at  and/or  form  under  which  this 
policy  is  written,  it  is  expressly  stipulated  and  made  a  condition 
of  this  contract  that  this  company  shall  be  held  liable  for  no 
greater  proportion  of  any  loss  than  the  amount  hereby  insured 
bears  to  80  per  cent  of  the  actual  cash  value  of  the  property 
described  herein  at  the  time  when  such  loss  shall  happen;  but 
if  the  total  insurance  upon  such  property  exceeds  80  per  cent  at 
the  time  of  such  fire,  then  this  company  shall  only  be  liable  for 
the  proportion  which  the  sum  hereby  insured  bears  to  such  total 
insurance.  If  this  policy  be  divided  into  two  or  more  items, 
the  foregoing  conditions  shall  apply  to  each  item  separately. 

Standard  Time  Clause. — It  is  understood  and  agreed  that  the 
word  "noon"  as  used  herein.  In  designating  the  beginning  and 
ending  of  the  term  of  insurance,  refers  to  Standard  Time  at  the 
place  where  the  property  is  located. 


DIVISION  VI 

HOTELS,    CLUBS    AND    BUSINESS    STABLES, 
AND  THEIR  CONTENTS 

Insurance  on  these  classes  usually  covers  the  building 
separately  from  contents,  with  such  further  division  of  the 
latter  as  may  be  desired,  or  as  may  be  required  by  local  under- 
writing rules. 

The  policies  usually  contain  the  following  permits  and 
clauses,  worded  in  accordance  with  local  rules: 

Other  Insurance,  Lightning,  Dynamo,  Electric  or  other 
Lighting  that  may  be  required.  Kerosene  Oil  Stoves,  Me- 
chanics, Work  and  Materials;  also  Vacancy  or  Unoccupancy 
as  permitted,  together  with  such  other  clauses  as  may  be 
necessary  or  desirable,  or  as  may  be  required  by  local  under- 
writing rules.  Permit  is  often  given  for  benzine  or  gasoline 
for  cleaning  purposes.  The  business  stable  should  have  the 
automobile  permit  if  any  motor  driven  vehicles  are  permitted 
therein.     (See  also  Special  Agreements.) 

HOTEL   BUILDING    FORM 
(Illustration) 

$ On    the building,    occupied    principally    for    hotel 

purposes,  including  additions  adjoining  and  communicat- 
ing, plumbing,  steam,  gas,  water,  or  other  piping;  lighting,  heat- 
ing, ventilating,  elevating,  refrigerating,  or  other  building  ap- 
paratus, fixtures  and  machinery,  and  all  other  permanent  fixtures 
that  are  a  part  of  the  realty;  plate  glass,  frescoes  and  decora- 
tions, signs  and  lettering,  flag  poles,  fences,  gratings  and  similar 
appurtenances;  also  storm  doors  and  windows,  screens,  screen 
doors  and  awnings,  whether  in  position  or  stored  in  said  building. 
Situate 

$ On  hotel,  restaurant  and  other  furniture,  fixtures,  furnish- 
ings and  equipment  of  every  description,  including  the  articles 
enumerated  in  the  policy  on  which  liability  is  required  to  be 
specifically  assumed,  wearing  apparel,  liveries,  canes,  umbrellas, 
bags,  trunks  and  jewelry,  and  all  other  personal  property  per- 
taining to  the  operation  of  a  hotel,  belonging  to  the  insured  or 
for  which  the  insured  is  legally  liable  at  the  time  of  fire,  but  this 
item  shall  not  include  property  covered  under  the  building  item  or 
under  the  stock  item;  all  while  contained  in,  on  or  attached  to  the 
above  described  building. 

255 


256  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

$. . .  .On  stock  of  bottled  water  and  soft  drinks,  cigars  and  other 
smokers'  materials  or  equipment,  provisions,  supplies  and  stores, 
while  contained  in  the  above  described  building. 

(Add  usual  or  required  clauses.) 

STANDARD  SEASON  HOTEL  OR  BOARDING  HOUSE 

FORM 

[Nenv  York) 

$ On    the story building    and    additions,    with 

roof including  all   permanent  fixtures  belonging 

thereto  while  therein  or  thereon,  situate  No on  the 

side  of Street,  in ,  County  of ,  N.  Y.,  while 

occupied  as  a  summer  hotel  or  boarding  house  with  not  to  exceed 

guest  rooms  and  not  to  exceed guests  or  boarders. 

This  insurance  also  to  cover  awnings,  door  and  window  screens, 
storm  doors  and  windows,  belonging  to  the  building,  in  place  or 
stored  in  the  above  building  or  in  the  outbuildings  on  the  premises. 

$....On  household  and  personal  property  of  every  description 
such  as  is  usual  or  incidental  to  a  boarding  house  or  hotel, 
belonging  to  the  assured  (including  drawings  and  manuscripts, 
at  not  exceeding  cost,  but  excluding  articles  specifically  insured), 
all  while  contained  in  the  above  described  building. 

$....0n    the story building    and    additions,    with 

roof,    while    occupied    for purposes,    including    all 

permanent  fixtures  thereto  while  therein  or  thereon,  situate  on 
the   above  described  premises. 

$....0n  vehicles  of  every  description,  harness  and  other  vehicle 
equipment,  hay,  grain,  straw,  feed,  barn  and  garden  tools,  while 
contained  in  the  above  described  building,  but  the  insurance 
under  this  item  does  not  cover  household  furniture  or  merchandise 
on  storage,  automobiles,  motorcycles  or  parts  thereof,  and  the 
storage  and  use  of  motor  vehicles  is  prohibited  unless  special 
permission  therefor  is  endorsed  hereon. 

$....0n   live  stock,  in  case  of  loss  no  one  horse  to  be  valued 

to  exseed  the  sum  of  $.  . .  .,  no  one  cow  to  exceed  the  sum  of  $ , 

no  one to  exceed  the  sum  of  $.... while  contained  in  the 

above  described  building. 

This  company  shall  be  liable  only  for  loss  or  damage  to  the 
property  described  in  items  having  the  amount  of  insurance 
thereon  filled  in,  and  if  no  amount  is  named  in  any  one  or  more 
of  the  above  items,  no  liability  for  loss  or  damage  to  property 
described  in  such  item  or  items  is  assumed. 

All  buildings  hereby  insured,  or  containing  the  property  insured, 
have  none  other  than  chimneys  or  flues  constructed  of  brick  or 
stone  (if  built  of  stone  they  have  flue  linings)  built  from  the 
ground  or  from  a  living  room  and  not  from  an  attic,  and  all 
smoke  pipes  enter  chimneys  or  flues  unobstructed  from  view  at  a 
point  below  the  attic,  except  as  follows: 


HOTELS,  CLUBS,  STABLES    AND  CONTENTS  257 

Limitation  Warranty 

In  consideration  of  the  reduced  rate  at  which  this  policy  is 
written,  it  is  a  condition  of  this  insurance  that  the  insured  warrants 
that  the  number  of  guest  rooms  and  guests  or  boarders  as  described 
in  this  policy  will  not  be  exceeded. 

(Attach  usual  clauses.) 

HOTEL  OR  BOARDING  HOUSE  AND  CONTENTS 

FORM 

(For  Use  on  Either  Fire  or  Tornado  Policies)   . 
{Uniformity  West) 

*1  $.  . .  .On  the story roof building,  in- 
cluding foundations,  plumbing,  electric  wiring  and  stationary 
heating,  lighting  and  ventilating  apparatus  and  fixtures  therein; 
also  all  permanent  fixtures  and  elevators  belonging  to  and  con- 
stituting a  part  of  said  building;  occupied  as situated 

This  insurance  shall  also  cover  under  this  item,  if  the  property 
of  owner  of  building,  door  and  window  screens  and  storm  doors 
and  windows,  belonging  to  above  described  building,  while  attached 
thereto  or  stored  therein. 

*2  $....0n  hotel  or  boarding  house  furniture,  fixtures  and 
furnishing  material,  useful  and  ornamental ;  printed  books  and 
music;  piano  stool  and  cover;  piano  and  other  musical  instru- 
ments; mirrors,  pictures,  paintings,  engravings,  including  their 
frames,  statuary  and  sculpture,  all  at  not  exceeding  cost;  wearing 
apparel  and  jewelry  in  use;  silver  and  plated  ware,  crockery, 
glassware  and  cutlery;  wines,  liquors  and  cigars;  bar  furniture  and 
fixtures;  supplies,  provisions  and  fuel;  laundry  machinery  and 
apparatus;  electrical  apparatus,  appliances  and  devices;  tools, 
implements  and  utensils  used  in  their  business;  signs  and  awnings 
(signs  and  awnings  covered  under  fire  policies  only)  ;  all  only 
while  contained  in,  or  attached  to,  the  above  described  building. 

This  insurance  doe,s  not  cover  the  property  of  guests  or  employees. 

*No  insurance  attaches  under  any  of  the  above  items  unless  a 
certain  amount  is  specified  and  inserted  in  blank  immediately 
preceding  the  item. 

(Attach  usual  clauses.) 

HOTEL  FURNITURE  AND   FIXTURES  FORM 

{Oivner  or  Tenant) 
$....0n  hotel,  restaurant,  bar  room  and  other  furniture,  fixtures, 
furnishings  and  equipment  of  every  description,  useful  and  orna- 
mental, including  beds,  bedding,  linen,  plate,  plated  ware,  china, 
crockery,  glassware,  cutlery,  pianofortes  and  other  musical  instru- 
ments, pictures,  paintings,  engravings,  and  their  frames,  statuary, 
articles  of  virtu,  printed  books  and  music,  wearing  apparel,  canes, 
umbrellas,  jewelry  in  use,  carpets,   rugs,   linoleum,  curtains,   dra- 


2e58  THE  AGENTS   KEY   TO   FIRE  INSURANCE 

peries,  fixed  and  movable  decorations,  natural  and  artificial  plants, 
shades,  awnings,  screens,  mirrors,  chandeliers,  gas  and  electrical 
fixtures,  gas  piping,  eledtric  wiring,  fans,  cash  registers,  adding 
machines,  typewriters,  sewing  machines,  iron  safes,  pool  and  bil- 
liard tables  and  appurtenances,  storm  doors,  lamp  posts,  signs, 
electric  signs  and  connections,  annunciators  and  connections,  office 
furniture  and  fittings,  stationery,  advertising  matter,  ranges,  kitchen 
utensils,  engines,  boilers,  pumps,  heating,  lighting,  ventilating  and 
fire  extinguishing  apparatus,  ice  making  and  refrigerating  plant 
and  apparatus,  kitchen,  dynamos,  motors,  machines,  machinery, 
foundations,  connections,  settings,  shafting,  belting,  pulleys,  hangers, 
pipes,  piping,  tanks,  and  all  other  fixtures,  appurtenances,  appa- 
ratus, appliances,  utensils,  implements  and  tools,  all  belonging  to 
the  insured,  or  for  which  the  insured  may  be  legally  liable,  and 

$.  . .  .On  stock  consisting  principally  of  bottled  water,  soft  drinks 
and   smokers'   materials    and   equipment,   provisions,   fuel,   supplies 

and  stores;   all  while  contained  in,  on  or  attached  to  the 

building  and  additions  adjoining  and  communicating,  situate 

(Attach  usual  or  required  clauses.) 

CLUB   HOUSE   AND    CONTENTS   FORM 

{City  or  Country) 
$ On  the building,  occupied  as  a including  ad- 
ditions and  extensions  adjoining  and  communicating,  plumbing, 
steam,  hot  water,  gas,  water,  or  other  piping;  lighting,  heating, 
ventilating,  elevating,  refrigerating,  or  other  building  apparatus; 
squash  courts,  bowling  alleys,  shuffle  boards,  lockers  and  other 
similar  property  built  in  or  permanently  attached  to  the  building, 
also  all  permanent  fixtures  that  are  a  part  of  the  realty;  plate 
glass,  frescoes  and  decorations;  also  storm  doors  and  windows, 
screens,  screen  doors  and  awnings,  whether  in  position  or  stored 
in  the  building,  situate 

$ On  club  house  furniture,  fixtures   and  equipment  of  every 

description,  useful  and  ornamental,  including  pictures,  paintings 
and  engravings  and  their  frames,  mirrors,  floor  and  room  furnish- 
ings and  fittings,  sporting  and  athletic  paraphernalia,  prizes  and 
trophies,  casts,  curiosities,  jewels,  manuscripts,  medals,  signs,  sculp- 
ture, office  furniture  and  fixtures,  property  held  on  storage  or  for 
repairs  for  which  the  club  is  liable,  and  all  other  property  be- 
longing to  the  club,  or  for  which  the  club  may  be  liable;  but  this 
item  shall  not  include  property  that  is  insured  under  the  building 
item,  nor  under  the  supplies  item.  All  while  contained  in  or 
on  the  above  described  building. 

$ On  club  supplies  and  stores  of  food  and  drink,  including 

tobacco  and  smokers'  articles  in  all  forms,  while  contained  in  the 
above  described  building. 

$ On  the building,  (as  defined  in  the  first  item),  oc- 
cupied as  a situate 


HOTELS,  CLUBS,  STABLES    AND  CONTENTS  259 

$ On  contents  (as  defined  in  the  second  item). 

NOTE: — The  form  may  be  continued  similarly  to  cover  any 
other  property. 

Permission  granted  for  the  use  of  premises  and  to  do  such 
work  and  use  such  materials  as  are  usual  to  clubs. 

(Add  other  usual  or  required  clauses.) 

LIVERY    AND    BUSINESS    STABLE    FORM 

$ On  the building  and  additions  adjoining  and  com- 
municating, and  all  permanent  fixtures  attached  to  and  forming 
part  of  the  realty,  including  signs  and  awnings,  while  occupied 
for purposes  and  situate 

$ On  horses  contained  therein  or  in  yards  immediately  adja- 
cent thereto;   (limit  on  any  one  horse  not  to  exceed  $ ). 

$ On  vehicles  of  all  kinds  (excluding  motor  driven  vehicles), 

horse  and  vehicle  equipment,  medicines,  liniments  and  lubricants, 
liveries,  barn  tools  and  apparatus,  and  office  furniture  and  fixtures, 
while  contained  therein. 

$ On  hay,  straw,  bedding,  grain  and  feed  of  all  kinds,  while 

contained  therein. 

This  policy  shall  cover  property  described  in  the  third  item  while 
temporarily  outside  the  buildings,  but  on  the  premises,  while  being 
cleaned,  aired  or  dried. 

(Attach  usual  or  required  clauses.) 

LIVERY    STABLE   AND    CONTENTS   FORM 

(For  Use  on  Either  Fire  or  Tornado  Policies) 
{Uniformity  West) 

*1  $.  . .  ,0n  the story roof building,  in- 
cluding foundations,  plumbing,  electric  wiring  and  stationary  heat- 
ing, lighting  and  ventilating  apparatus  and  fixtures  therein;  also 
all  permanent  fixtures,  stationary  scales  and  elevators,  belonging 
to  and  constituting  a  part  of  said  building;  occupied  as  a  livery, 
sale  and  feed  stable,  situated 

*2  $..,.0n  vehicles  (not  including  sleighs),  buggies,  carriages, 
wagons,  and  such  rolling  stock  usually  contained  in  livery  stables 
(excluding  automobiles  and  motorcycles),  all  only  while  con- 
tained in  the  above  described  building. 

*3  $....0n  horses  and  mules,  in  case  of  loss  this  company  will 
not  be  liable  for  more  than  (or  in  case  of  other  insurance  for 
more  than  its  pro  rata  proportion  of)  $250  on  any  one  horse  or 
any  one  mule,  nor  in  any  case  for  more  than  the  actual  cash  value 
of  the  animal  damaged  or  destroyed,  only  while  contained  in 
above  described  building,  and  provided  this  form  is  attached  to  a 
fire  policy,  against  loss  by  lightning  while  on  or  off  the  premises. 


260  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

*4  $ On  hay,  grain  and  feed;  sleighs,  harness,  blankets,  robes, 

whips,  lamps,  lanterns,  tools,  implements  and  supplies;  electrical 
apparatus,  appliances  and  devices;  signs  and  awnings  (signs  and 
awnings  covered  under  fire  policies  only)  ;  office  furniture,  fixtures 
and  supplies;  all  while  contained  in,  or  attached  to,  the  above 
described  building. 

*5  $....0n 

*No  insurance  attaches  under  any  of  the  above  items  unless  a 
certain  amount  is  specified  and  inserted  in  blank  immediately 
preceding  the  item. 

(Attach  usual  clauses.) 

LODGE  OR  SOCIETY  FURNITURE  FORM 

$ On   their   lodge    (society)    furniture   and  fixtures,   banners, 

badges,  regalia,  paraphernalia,  screens,  partitions,  office  furniture 
and  supplies,  awnings,  casts,  curiosities,  drawings,  dies,  imple- 
ments, jewels,  manuscripts,  medals,  pictures  and  their  frames,  signs 
and  sculpture,  including  personal  property  for  which  the  lodge 
(society)  may  be  liable  in  case  of  loss  or  damage  by  fire;  together 
with  improvements  and  betterments  to  the  building  when  not  cov- 
ered under  the  building  insurance,  all  while  contained  in  or  on  or 

attached    to    the building,    occupied    for purposes, 

situate 

(Attach  lightning  and  other  clauses  necessary.) 

LODGE   FURNITURE   AND   FIXTURES   FORM 

{Uniformity  West) 

*1  $ On  lodge  furniture,  fixtures,  furnishings  and  equipment, 

including  desks,  safes,  typewriters,  tables,  chairs,  cases,  cabinets, 
tools  and  implements;  signs  and  awnings  (signs  and  awnings 
covered  under  fire  policies  only)  ;  stereopticon  and  attachments, 
including  slides  used  in  connection  therewith;  phonographs,  grapho- 
phones,  records,  printed  books,  music  and  music  rolls;  pianos  and 
other  musical  instruments  (excluding  organ  with  operating  motor)  ; 
mirrors,  pictures,  paintings,  engravings,  including  their  frames, 
statuary  and  sculpture,  all  at  not  exceeding  cost;  carpets,  rugs, 
linoleums,  mattings,  floor  coverings,  window  and  door  shades, 
curtains  and  portieres;  lamps,  stoves  and  heating  devices;  china, 
glassware,  crockery,  silver  plate  and  plated  ware;  costumes,  robes, 
paraphernalia  and  regalia  and  all  other  articles,  materials  and 
supplies  usual  to  lodges  of  secret  and  fraternal  organizations; 
their  own  or  held  by  them  in  trust,  or  the  property  of  others 
for  which  they  may  be  legally  liable;  all  only  while  contained  in, 

or     attached    to,    the story roof building, 

situated 

*2  $....On  organ  with  operating  motor,  only  while  contained 
in  the   above   described  building. 


HOTELS,    CLUBS,    STABLES   AND    CONTENTS  261 

*3  $....0n   assured's  interest  in  improvements  to  the  building, 

consisting  chiefly  of all  only  while  contained  in,  or  attached 

to,  the  above  described  building. 

*4  $....0n 

*No  insurance  attaches  under  any  of  the  above  items  unless 
a  certain  amount  is  specified  and  inserted  in  blank  immediately 
preceding  the  item. 

(Attach  usual  clauses.) 


DIVISION  VII 


ELEVATORS,  WAREHOUSES,  COLD  STORAGE  ] 
HOUSES  AND  THEIR  CONTENTS  ] 

■I 

Insurance  on  this  class  of  property  usually  covers,  sepa-  ■ 
rately,  the  building  and  stock  therein.  In  some  sections  a  \ 
separation  of  the  machinery  is  required  also. 

■      .  ! 

Policies  covering  such  property  usually  contain  the  follow-  • 
ing  permits  and  clauses,  worded  in  accordance  with  local  j 
rules : 

Other  Insurance,  Lightning,  Dynamo,  Electric  or  other  | 
Lighting  that  may  be  required.  Kerosene  Oil  Stove,  Me-  , 
chanies,  Work  and  Materials;  also  Cease  Operations  and  j 
Vacancy  or  Unoccupancy  as  permitted,  together  with  such  j 
other  clauses  as  may  be  necessary  or  desirable,  or  as  may  be  \ 
required  by  local  underwriting  rules.  (See  also  Special  \ 
Agreements.)  ) 

The  forms  given  are  intended  for  use  in  insuring  any  risk  ': 
of  these  respective  classes,  though  some  will  require  addi-  J 
tional  or  special  wording  or  cover  to  fit  specific  needs.  i 

Goods  in  Bond : — There  is  usually  no  reason  for  including  i 
the  U.  S.  Internal  Revenue  Tax  nor  the  U.  S.  Customs  Tax  j 
in  the  insurance  on  goods  in  bond,  for  the  government  does 
not  require  payment  of  such  taxes  in  case  of  fire  unless  the 
goods  are  removed,  in  which  case  the  payment  of  the  tax 
would  be  a  part  of  the  expense  of  salvage.  If  the  tax  has 
been  paid,  it  is  the  practice  of  the  government  to  refund  same 
on  proof  that  the  goods  have  been  destroyed  by  accidental 
fire.  Sometimes  the  following  conditions  are  included  in  the 
policy  form  when  insuring  imported  goods  held  in  bond: — 

"It  is  understood  and  agreed  that  the  Custom  House  duties 
payable  to  the  U.  S.  Government  on  property  covered  by  this 
policy  shall  not  be  considered  as  part  of  the  value  insured  in 
event  of  loss  or  damage.  It  is  also  understood  and  agreed  that 
on  demand  of  this  Company,  in  event  of  loss,  the  insured 
sliall,  *to  protect  the  property  from  further  damage,'  prompt- 

'2G2 


ELEVATORS,  WAREHOUSES  AND  CONTENTS  263 

ly  pay  all  government  duties,  warehouse  and  other  charges 
necessary  for  the  purpose  of  removal  of  said  merchandise  to 
such  other  locatiou  as  may  be  designated  by  this  Company." 

ELEVATOR  BUILDING  FORM 
(Illustration) 

On  the  elevator  building  and  additions,  known  as Ele- 
vator, together  with  all  appurtenances  thereunto  belonging,  includ- 
ing towers,  docks,  legs,  wharves,  foundations,  tanks,  plumbing, 
heating,  lighting,  elevating,  steam,  gas,  water  and  electrical  equip- 
ments, apparatus  and  appliances,  and  all  other  property  of  every 
kind  and  description  belonging  to  said  building  or  buildings,  or  to 
the  operation  of  the  same,  and  on  all  the  contents  thereof,  and  on 
all  property  of  every  kind  and  description  in  or  upon  said  prop- 
erty or  building,  or  adjacent  thereto,  belonging  to  or  used  by  said 
Elevating  Company  in  or  on  its  said  property  or  buildings  or  in 
the  operation  of  the  said  elevator,  including  machinery,  machines, 
shafting,  belting,  wiring,  pulleys,  hangers,  transmission  ropes, 
stores,  supplies,  elevator  buckets,  tools,  awnings,  signs,  imple- 
ments, apparatus,  utensils,  office  and  other  furniture  and  fixtures. 

It  is  understood  and  agreed  that  grain  or  other  stock  in  trade 
which  may  be  kept  in  said  elevator,  piling  and  foundations  below 
the  mean  water  level,  and  property  belonging  to  others  on  which 
there  may  be  specific  insurance  are  not  covered  by  this  policy. 

All  of  the  above  described  property  situate  or  located  on  land 

owned  by  assured  on  the 

PERMISSION   GRANTED   TO 

Have  or  procure  additional  insurance. 

Work  and  run  machinery  at  all  times. 

Cease  operations  for  not  to  exceed  60  days  at  any  one  time. 

Do  such  work  and  use  such  materials  as  are  usual  in  the  business 
iof  grain  elevator  as  conducted  by  the  assured. 

Employ  mechanics  for  ordinary  alterations  and  repairs  in  the 
within  described  premises,  but  this  shall  not  be  held  to  include 
the  constructing  or  reconstructing  of  the  building  or  buildings  or 
additions,  or  the  enlargement  of  the  premises  and  nothing  herein 
shall  be  held  to  void  any  privileges  granted  in  the  printed  condi- 
tions of  this  policy. 

(Add  other  necessary  or  required  clauses.) 

ELEVATOR  BUILDING  AND   GRAIN  FORM 

(Uniformity  West) 
(For  Use  on  Either  Fire  or  Tornado  Policies) 

On  the  following  described  property,   all   situated 

*1  $....0n   the roof elevator  building,   including 

foundations,    plumbing,    electric    wiring    and    stationary    heating. 


264  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

lighting  and  ventilating  apparatus  therein,  and  all  permanent 
fixtures  belonging  to  and  constituting  a  part  of  said  building; 
also  fixed  and  movable  machinery,  electrical  or  otherwise,  shafting, 
pulleys,  belting,  spouts,  scales,  elevators,  tools,  office  furniture, 
fixtures  and  supplies;  all  only  while  contained  in  the  above 
described  building,  known  as  the Elevator. 

*2$....On    the story roof engine    and 

boiler  house  building,  including  foundations,  plumbing,  electric 
wiring  and  all  permanent  fixtures  belonging  to  and  constituting 
a  part  of  said  building. 

*3  $....0n  engines,  boilers,  fixed  and  movable  machinery,  elec- 
trical or  otherwise,  pumps  and  connections  belonging  thereto,  all 
only  while  contained  in  above  described 

*4  $....On  grain  and  seeds,  including  bags;  and  provided  the 
assured  is  legally  liable  therefor,  this  item  shall  also  cover  said 
merchandise  while  held  in  trust,  or  on  commission,  or  sold  but 
not  delivered;  only  while  contained  in  the  above  described  elevator 
building  or  in  cars  within  100  feet  thereof. 

*5  $....0n 

*No  insurance  attaches  under  any  of  the  above  items  unless  a 
certain  amount  is  specified  and  inserted  in  blank  immediately 
preceding  the  item. 

No  smoking  shall  be  permitted  (except  in  office)  and  no  open 
lights  (except  cold  blast  tubular  watchman's  lanterns)  shall  be 
used  in  the  above  described  elevator  building. 

(Attach  usual  clauses.) 

ELEVATOR  BUILDING  AND  GRAIN  FORM 

(For  Other  Than  Terminal  Elevators) 

(For  Use  on  Either  Fire  or  Tornado  Policies) 

{Uniformity  West) 

On  the  following  described  property,  all  situated 

*1  $ On  the power roof elevator  build- 
ing, including  foundations,  plumbing,  electric  wiring  and  stationary 
heating,  lighting  and  ventilating  apparatus  therein,  and  all  per- 
manent fixtures  belonging  to  and  constituting  a  part  of  said 
building;  also  engines,  boilers,  fixed  and  movable  machinery, 
electrical  or  otherwise,  pumps  and  connections  belonging  thereto; 
shafting,  pulleys,  belting,  spouts,  scales,  elevators,  tools,  office 
furniture,   fixtures   and   supplies;   all   only  while  contained  in  the 

above  described  building,  known  as  the Elevator. 

*2  $ On    the story roof engine    and 

boiler    house    building,    including    foundations,    plumbing,    electric 
wiring  and   all   permanent  fixtures   belonging  to   and  constituting 
a  part  of  said  building. 
*3  $ On  engines,  boilers,  fixed  and  movable  machinery,  elec- 


ELEVATORS,    WAREHOUSES    AND    CONTENTS  2G5 

trical  or  otherwise,  pumps  and  connections  belonging  thereto,  all 
only  while  contained  in  above  described  engine  and  boiler  house 
building. 

*4  $ On    grain,    seeds,    beans,    peas,    flour,   feed,   meal,    stock 

food,  salt,  lime,  cement,  coal,  wool,  including  bags  and  sacks, 
and  such  other  merchandise  as  is  usually  kept  in  grain  elevators 
(except  hay  and  straw  unless  specifically  mentioned)  ;  and,  pro- 
vided the  assured  is  legally  liable  therefor,  this  item  shall  also 
cover  said  merchandise  while  held  in  trust,  or  on  commission,  or 
sold  but  not  delivered;  only  while  contained  in  the  above  described 
elevator  building  or  in  cars  within  100  feet  thereof. 

*5  $....0n 

*No  insurance  attaches  under  any  of  the  above  items  unless  a 
certain  amount  is  specified  and  inserted  in  blank  immediately 
preceding  the  item. 

(Attach  usual  clauses.) 

GRAIN  IN  ELEVATOR,  OWNERS  (OR  LESSEES) 
FORM  • 

On  grain  of  every  kind  and  description,  including  freight,  back 
charges,  charges,  advances,  liens  and  claims  thereon,  not  to  ex- 
ceed in  gross  the  actual  market  value  in their  own  or  in 

their  custody  as  care  parties,  forwarders,  carriers,  in  trust,  on 
commission,  on  consignment,  on  account,  joint  account,  or  other- 
wise, or  sold  but  not  delivered,  and  delivered  but  not  paid  for, 
or  which  the  assured  or  any  of  them,  shall  elect  to  cover  hereunder, 

unless    otherwise    specifically    insured,    contained    in    the 

situate 

Notice  from  the  assured  within  60  days  from  date  of  loss  to  be 
binding  on  insured  and  insurer  as  to  what  grain  is  covered  here- 
under. 

Nothing  herein  shall  be  held  to  make  the  insurer  hereunder 
liable  for  contingent  or  consequential  loss  or  liability  of  any  kind. 

Privilege  to  make  alterations  and  repairs,  to  effect  other  insur- 
ance, to  operate  day  and  night,  or  to  be  closed  indefinitely  without 
prejudice  to  this  policy. 

100%  Average  Clause  5%  Waiver. 

Lightning  Clause. 

Electrical  Permit. 

(Add  other  necessary  or  required  clauses.) 

CHARGES  ON  GRAIN  FORM 

{Special) 
On   "Charges"  on   grain   and   seeds   of   all  kinds,  their   own   or 
held  in  trust  or  on   commission,   or   sold  but  not  delivered,  if  in 
case  of  loss  the  assured  is  legally  liable  therefor:  while  contained 
in 


26Q  THE  AGENTS   KEY   TO   FIRE   INSURANCE  ■ 

i 

The   term    ''Charges"    as    used   herein   is   intended   to    and   does      ' 

hereby  cover  and  include  the  following,  viz.:  ! 

1.  Receiving,  handling,  storage  and  delivery  charges,  consisting 

oi  V/i  cents  per  bushel,  for  each  and  every  bushel  of  grain  and  \ 
seeds,  contained  in  said  buildings  and  an  additional  one-thirtieth  ! 
of  one  per  cent  per  bushel  for  each  day  or  fractional  part  thereof,  \ 
following  the  fifteen  days  next  after  the  receipt  of  the  grain  , 
until  the  date  of  the  fire.  | 

2.  Carrying  charges  as  owners,  vendors,  and,  or,  warehouse-  \ 
men  on  said  grain  and  seeds,  to  be  ascertained  by  deducting  the  j 
cash  market  price  thereof  on  the  day  of  and  at  place  of  fire  \ 
from  the  price  of  an  equal  amount  of  grain  and  seeds  for  such  \ 
future  delivery  at  any  market  which  the  assured  may  select  from  • 
the  closing  market  quotations  therefor  on  the  day  of  fire,  also 
all  other  established  profits  (if  any)  on  existing  contracts  or  i 
sales   including  commissions   and   advance  freight  charges.  ! 

3a.  Excess  of  price   (if  any)   which  the  assured  shall  pay,  over 

and  above  the  said  market  price  for  future  delivery  selected  for  j 

settlement   of    carrying    charges    above   named,    in   purchasing   on  : 

the  first  market  day  after  the  fire  an  equal  amount  of  like  grades  j 

of  grain  and  seeds  for  the  same  future  delivery.  : 

3b.     Excess  of  price   (if  any)   which  the  assured  shall  pay  over  j 

and  above  the  cash  value  on  day  of  fire  in  purchasing  an  amount,  j 
of  like   grades  and  quality,  equal  to  that  damaged  or  destroyed, 

and   under   either   "3a"    and   "3b"   or   both,    such   additional   sums  | 

(if   any)    as  the    assured   may  be   required   to   pay   or   assume  in  i 

liquidation  of  damages  or  penalties  incurred  through  the  inability  | 

of  assured  to  obtain  like  quantities  and  or  grades  and  or  qualities  | 

with  which  to  fill   any  contracts  for  future   delivery  of  grain  or  ; 

seeds,  existing  at  date  of  fire.  j 

4.  The  increased  values  (if  any)  of  grain  and  seeds  which  \ 
the  assured  could  have  produced  by  cleaning,  handling  and 
improving  the  qualities  or  grades  of  said  grain  and  seeds  over 
and  above  their  condition  at  the  time  of  fire,  as  evidenced  by 
what  has  already  been  done  by  the  assured  per  assured's  books 
and  records,  less  the  cost  and  expense  of  improving  said  grades. 

5.  Loss  of  fire  insurance  premiums  on  policies  surrendered  on 
account  of  fire,  and  covering  on  "Charges"  and  on  said  grain  and 
seeds  and  on  said  buildings  at  the  time  of  fire,  which  loss  shall 
be  the  total  pro  rata  premiums  on  all  said  policies,  computed  on 
each  policy  from  the  day  of  fire  to  the  expiration  of  such  policy. 

6.  Interest  at  the  rate  of  six  per  cent  per  annum  on  the  amount 
of  loss  by  fire,  for  the  period  of  time  from  the  date  of  fire  to 
the  expiration  of  sixty  days  from  date  of  accepted  proofs  of  loss 
on  the  said  grain  and  seeds,  buildings  and  charges. 

In  case  of  loss  the  price  of  grain  and  seeds  for  future  delivery 


ELEVATORS,    WAREHOUSES    AND    CONTENTS  2G7 

shall   be  determined  by  the  officially  published  market  quotations 
of  any  market  selected,  provided:  that  if  fire  occur  on  any  market 
holiday    or    Sunday,    the    closing   market   price    of    last   preceding 
market  day  shall  govern. 
Other  insurance  permitted. 

GRAIN    FORM 
(Terminal  Elevators) 

(For  Use  on  Either  Fire  or  Tornado  Policies) 

{Uniformity  West) 

$....0n  grain  and  seeds,  including  bags;  and,  provided  the 
assured  is  liable  therefor,  this  item  shall  also  cover  said  mer- 
chandise while  held  in  trust,  or  on  commission,  or  sold  but  not 
removed,  only  while  contained  in  the power  elevator  build- 
ing, or  in  cars  within  one  hundred  feet  thereof,  known  as 
the Elevator,   situated 

Loss  Payable  Clause 

Loss,  if  any,  to  be  adjusted  with  original  assured  named  herein, 
and  payable  to  assured  or  order  hereon  with  the  return  of  this 
contract.  In  event  of  sale  and  delivery  of  any  property  insured 
hereunder,  this  contract  will  remain  in  full  force  and  effect  for 
the  sole  use  and  benefit  of  the  purchaser  of  any  property  covered 
by  this  contract  until  12  o'clock  noon  of  the  next  business  day 
succeeding  the  delivery  of  the  property  (only  payment  in  full  by 
check  or  otherwise,  and  delivery  of  warehouse  receipts  shall 
constitute  a  delivery  as  above  described),  but  from  and  after 
that  time  this  contract  shall  be  void  as  to  any  person  claiming 
thereunder,  except  the  original  assured,  for  whom  it  shall  continue 
in  force  as  heretofore,  covering  other  property  as  herein  described. 

(Attach  usual  clauses.) 

(Elevators— Other  Than  Terminal) 

(For  Use  on  Either  Fire  or  Tornado  Policies) 

{Uniformity  West) 

$....On  grain,  seeds,  beans,  peas,  flour,  feed,  meal,  stock  food, 

salt,  lime,  cement,  coal,  wool,  including  bags  and  sacks,  and  such 

other   merchandise   as   is   usually  kept  in   grain   elevators    (except 

hay  and   straw  unless  specifically  mentioned)  ;    and   provided  the 

assured  is  legally  liable  therefor,  this  item  shall   also  cover  said 

merchandise   while   held    in   trust,   or   on   commission,   or   sold    but 

not   delivered;    all   while   contained   in   the power 

roof elevator  building,  or"  in  cars  within   100  feet  thereof, 

known   as  the Elevator,   situated 

(Attach  usual  clauses.) 


268  THE  AGENTS    KEY   TO   FIRE  INSURANCE  \ 

GRAIN  IN  ELEVATOR  \ 

{Open  Policy  Form)  \ 

On  any  and  all  grain,  seed,  flour,  malt,  and  other  merchandise 

of    every    kind    and    description,    including    freight,    back   charges,  \ 

charges,  advances,  lien  and  claims  thereon,  not  to  exceed  in  gross  ; 

the  actual  market  value  in their  own  or  in  their  custody  ■ 

as   warehousemen,    forwarders,   carriers,    in   trust,   on   commission,  ! 

on   consignment,   on   account,  joint   account,   or   otherwise,   or   sold  i 

but   not   delivered   and   delivered  but   not   paid   for,   unless   other-  \ 

wise   specifically   insured,   provided   that   the    insurance    hereunder  ■ 

has  not  been  terminated,  contained  in  such  elevators  or  in  cars  on  j 

tracks    alongside    thereof,    or    adjacent    thereto    or    at    such    other  1 

places    as    may    be    designated    in    the    City    of for    such  j 

amounts   and   at  such  premiums   as  may  be   named  in  certificates  : 

issued   hereunder  or   entered   in   open   policy   books   kept   therefor.  ' 

In  event  of  a  certificate  being  issued,  the  same  shall  not  be  deemed  ' 
to   be    for    additional    insurance    to   the    amount   entered    in   open 

policy  book.  ■ 

All   risks  shall  commence  at  the  hour  of  their  acceptance  from  \ 

the   assured   by  the   agents   of   this   company    and   shall    terminate  j 

at  the  hour  of  acceptance  of  notice   of  cancellation   from  the   as-  j 

sured  by  said  agents  and  shall  not  be  binding  or  of  effect  beyond  ,  ', 

such  time.  j 

Whenever  the  interest  of  a  common  carrier  is  insured  hereunder    i 
this  policy  shall  extend  to  cover  the  assured  as  named  herein,   as    ' 
owners   or   as   agents,   or   for   the   benefit   of   the   owners   of   said 
property   or   for   those    entitled   to  the   possession   thereof.     Notice    j 
within  60  days  from  date  of  loss,  from  the  assured,  to  be  binding    j 
upon  the   assured   and  the   assurer   as  to  who,  in   addition   to  the     ■ 
assured,  was  insured  hereunder.     Provided,  however,  that  if  any 
of    the    property    insured    shall    have    also    been    insured    by    the    ' 
owner,  agent  or  other  person,  loss  or  damage,  if  any,  shall  be  paid 
thereunder  only  to  the  extent  of  the  excess  of  such  loss  or  damage    { 
over    the    amount    of    the    adjusted    liability    under    the    insurance 
taken  out  by  the  owner,  agent,  or  other  person  last  above  referred     | 
to,  it  being  the  purpose  of  this  insurance  to  cover  the  liability  in    | 
full  of  the  assured  as  warehousemen,  forwarders,  carriers,  trustees 
or    agents,    not    exceeding    the    amount    hereby    insured,    nor    the    i 

actual  market  value  of  the  property  insured  in ,  at  the  time    J 

of  fire,  and  nothing  herein  shall  be  held  to  make  the  assurer  here-  1 
under  liable  for  contingent  or  consequential  loss  or  liability  of  any  • 
kind. 

Whenever  contingent  or  conditional  insurance  shall  be  accepted  '[ 
under  this  policy,  it  is  agreed  by  the  assured  hereunder  that  the 
same  shall  be  construed  and  be  Excess  Insurance  only,  and  that 
such  insurance  shall  not  contribute  with  any  insurance  regularly 
created  and  actually  existing,  but  shall  be  liable  only  for  its  pro 
rata  proportion,  not  exceeding  the  amount  insured,  for  the  value 
of  such  merchandise  as  may  be  in  excess  of  the  total   amount  of 


ELEVATORS,    WAREHOUSES    AND    CONTENTS  269 

all   insurance  actually  existing  and  regularly  bound,  which  excess 
only  shall  be  deemed  to  be  covered  under  this  policy. 

Privilege  to  make  alterations  and  repairs,  effect  other  insurance 
without  notice  until  required,  to  operate  day  and  night,  or  to  be 
closed  indefinitely  without  prejudice  to  this  policy. 

All  entries  hereunder  covering  in  steel  or  fireproof  elevators  or 
tanks  are  subject  to  the  100%  Average  Clause  attached  hereto  and 
all  other  entries  are  subject  to  the  80%  Average  Clause  attached. 

Lightning  Clause. 

(Add  other  usual  or  required  clauses.) 

OPEN  POLICY  ON  MERCHANDISE  IN  WAREHOUSE 

{Issued  to  Operator  of  Warehouse) 

The  liability  under  this  policy  shall  be  limited  to  such  amounts 
and  shall  be  in  effect  for  such  periods  as  may  be  shown  by  the 
separate  entries  made  in  the  Open  Policy  Book  attached  hereto. 

On  merchandise  of  all  kinds,  including  packages,  the  property 
of  the  insured;  and  on  the  interest  of  the  insured  in  and/or  liabil- 
ity for  similar  property  held  on  storage,  or  for  repairs,  or  other- 
wise, and  belonging  in  whole  or  in  part  to  others,  while  contained 
in  the building,  or  while  temporarily  on  platforms,  side- 
walks, trucks  and  cars  alongside,  in  process  of  loading  or  unload- 
ing, situate 

No  risks  under  this  policy  shall  be  binding  until  accepted  by 
,  agents  of  this  Company  at 

All  risks  shall  commence  from  the  time  of  their  acceptance  by 
the  agents  of  this  Company  and  shall  terminate  at  the  time  of 
cancellation  by  said  agents  and  shall  not  be  considered  binding 
or  in  force  beyond  such  time  of  cancellation. 

It  is  mutually  understood  and  agreed  that  this  policy  does  not 
cover  property  which  is  specifically  insured. 

Other   insurance   permitted. 

80%  Coinsurance  clause  attached. 

Lightning  clause   attached. 

Slectric  light  clause   attached. 
Consequential  Damage  Clause  if  Cold  Storage.) 
I 


870  TUE  AGENTS   KEY  TO  FIRE  INSURANCE 

CERTIFICATE  OF  INSURANCE 

(For  the  Insured  Under  Open  Policy) 


^"^°""' Example  Insurance  Co.  ^"^j^"' '° 

Rate 

T,  .  NEW  YORK  •; 

Premium  clauses. 

19.... 

^bfg  Certifies    That    ha. . . 

insurance  by  this  Company  against  loss  or  damage  by  fire 

under  Policy  No Entry  No 

issued  through  its  agency  at , 

to    the    amount    of Dollars, 

on    

terminating day  of 19 . . ,  at  noon. 

Loss,   if   any,   in   conformity  with   the   conditions   of   said 

Policy,  to  be  adjusted  with 

and  payable  to 

only  on  presentation  of  and  surrender  of  this  Certificate. 

Not   valid    until    countersigned    by    the    authorized    agent 
at 

President  or  Manager. 

Countersigiied  at this day  of 19. . . . 

Agent 


COLD  STORAGE  BUILDING  FORM 

$ On  the building,  occupied  for purposes,  in- 
cluding additions  and  extensions  adjoining  and  communicating,.] 
heating,  lighting,  water  or  other  circulating  piping  and  fixtures,] 
ventilating,  elevating  and  plumbing  apparatus  and  fixtures,  boilers, 
engines,  dynamos,  ice  and  refrigerating  machines  and  machinery  j 
and  tools  and  appurtenances  pertaining  thereto,  and  all  other  ap- 
paratus and  fixtures  used  for  the  service  of  the  building  for  the 
above  described  purposes,  including  office  equipment,  advertising! 
matter,  signs  and  awnings  therein,  thereon  or  attached  thereto,] 
situate 


ELEVATORS,    WAREHOUSES    AND    CONTENTS  271 

Permission  granted  to  cease  operations  during  customary  seasons, 
and  to  do  such  work  and  use  such  materials  as  are  customary 
in  such  plants. 

(Add  usual  and  required  clauses.) 


NOTE: — It  is  customary  to  require  that  a  consequential  dam- 
age clause  be  made  a  part  of  the  contract,  the  following  forms 
being  widely  used: 

Consequential  Damage  Clause. —  (To  be  attached  to  all  poli- 
cies covering  on  merchandise,  stocks  or  products,  in  houses  arti- 
ficially cooled.)  This  policy  does  not  cover,  and  this  Company 
shall  not  be  liable  for  any  indirect  or  consequential  loss  or  damage, 
including  loss  or  damage  caused  by  change  of  temperature  resulting 
from,  occasioned,  or  caused  by  the  total  or  partial  destruction  by 
fire  or  lightning,  of  the  refrigerating  or  cooling  apparatus,  con- 
nections or  supply  pipes,  nor  by  the  interruption  of  the  refrigerating 
or  cooling  processes  from  any  cause. 

Consequential  Damage  Clause. — This  Insurance  Is  against  only 
direct  loss  or  damage  by  fire,  and  does  not  cover  any  loss  or  dam- 
age caused  by  change  of  temperature  resulting  from  the  total  or 
partial  destruction  or  disablement  by  fire  or  lightning  of  the  cool- 
ing or  other  apparatus,  connections  or  supply  pipes,  nor  by  the 
interruption  of  the  cooling  or  other  processes  from  any  cause. 

Consequential  Damage  Clause. —  (Liability  assumed.)  This  in- 
surance  being  otherwise    against  only   direct   loss   or   damage   by 

fire,  in  consideration   of  $ additional   premium,   this   Company 

also  assumes  liability  (not  exceeding  the  amount  of  this  policy  re- 
maining after  the  liability  of  this  Company  for  any  direct  loss  or 
damage  has  been  determined)  for  any  loss  or  damage  to  the 
property  described  while  contained  in  the  above-named  building, 
caused  by  change  of  temperature,  resulting  from  the  total  or  partial 
destruction  or  disablement  of  the  cooling  apparatus,  connections  or 
supply  pipes,  by  fire  occurring  in  the  above-described  building,  or 
in  any  other  of  the  following  buildings: 

(Here  name  the  location  of  the  refrigerating  plant  and  any  other 
building  through  which  the  supply  pipes  pass,  and  which,  if  burn- 
ing, might  disable  them.) 

COLD  STORAGE  MERCHANDISE  FORM 
{Operator's   Insurance^ 

$..  ..On  merchandise  in  bulk  or  in  packages  and  packages  con- 
taining same,  also  on  stock  of  Ice  and  on  stock  of  packages  of 
all  kinds  including  cooperage  stock,  the  property  of  the  insured 
or  held  in  trust  or  on  commission,  or  sold  but  not  delivered  or  re- 
moved, or  on  storage  for  others  for  which  the  insured  may  be 
legally  liable,  together  with  all  accrued  charges,  advances,  liens 
and  claims  thereon  but  this  policy  shall  not  cover  contents  of  fire- 


St2  THE  AGENTS   KEY  TO  FIRE  INSURANCE  ' 

proof  safe,  nor  property  upon   which   the   insured   has   disclaimed   ! 
liability  to  parties  for  whom  it  is  held,  nor  for  which  the  insured 
is  not  liable  in  case  of  loss,  nor  property  belonging  in  whole  or  in  i 
part   to   others    and   separately   or    specifically   insured;    all    while 

contained    in    the building    occupied    principally    for    cold  \ 

storage  purposes,  situate 

In  the  event  of  there  being  specific  insurance  on  any  of  the 
property  as  above  described,  this  insurance  shall  apply  only  for  i 
such  an  amount  as  the  actual  value  of  the  said  specifically  insured  ' 
property,  including  in  addition,  liens,  advances,  freight,  storage  ! 
and/or  other  accrued  charges  thereon,  exceeds  the  amount  of  said  j 
specific  insurance  as  adjusted  and  then  shall  apply  only  after  the  i 
said  specific  insurance  is  exhausted. 

It  is  understood  that  this  insurance  shall  not  be  invalidated  by  i 
any  pledge  of  the  property  as  collateral  or  by  any  encumbrance 
thereon.  , 

(Attach   consequential    damage   clause    and   other    usual    or    re-  i 
quired  clauses.)  j 


COLD  STORAGE  MERCHANDISE  FORM  I 

{Insurance  in  Name  of  Operators) 

$....0n  merchandise  and  packages  therefor,  belonging  to  the  '. 
insured,  or  for  which  the  insured  may  be  liable  and  on  which  the  . 
insured  has  issued  certificates  of  insurance;  also  all  accrued  ' 
charges,  advances,  liens  and  claims  on  such  merchandise,  and  on  j 
any  other  interest  of  the  insured  in  merchandise  to  the  extent  of  i 

such  interest,  all  while  contained  in  the building  and  addi-  ! 

tions  adjoining  and  communicating,  occupied  principally  for  cold  j 
storage  purposes,  situate 

It  is   understood   and    agreed   that   this   policy   attaches   only   to 
goods  not  more  specifically  insured. 

In   case    of   loss,    adjustment   to   be   made    directly   between   the 
parties  for  whom  the  goods  are  held  and  the  insurers. 

Loss,  if  any,  payable  to or  order  hereon;  and  this  policy 

shall   not  be  void  on    account  of   any  pledge  of  the  property  as 
collateral. 

This  insurance  being  otherwise  against  only  direct  loss  or  dani-  : 

age  by  fire,  in  consideration  of  $ additional  premium,  this. 

Company  also  assumes  liability  (not  exceeding  the  amount  of  this  i 
policy  remaining  after  the  liability  of  this  Company  for  any  direct 
loss  or  damage  has  been  determined)  for  any  loss  or  damage  to  i 
the  property  described  while  contained  in  the  above  named  build- 
ing, caused  by  change  of  temperature,  resulting  from  the  total  or 
partial  destruction  or  disablement  of  the  cooling  apparatus,  connec- 
tions or  supply  pipes,  by  fire  occurring  in  the  above  described 
buildings,  or  in  any  other  of  the  following  buildings 

(Attach  other  usual  or  required  clauses.) 


ELEVATORS,    WAREHOUSES    AND    CONTENTS  273 

CONSEQUENTIAL  LOSS  AND  DAMAGE  FORM  NO.  1 

(Single    Source   Equipment) 
{Uniformity  West) 

$.... Against  consequential  loss  or  damage  to  stock  of  mer- 
chandise  consisting  principally  of only  while  contained   in 

the story roof building  occupied  as  a 

situated 

The  following  provisions  are  also  made  a  part  of  this  insurance: 

1 — That  this  company  shall  be  liable  only  for  such  loss  or 
damage  to  the  property  insured,  not  exceeding  the  sum  insured 
under  this  policy,  nor  the  interest  of  the  assured  in  the  property, 
as  may  be  caused  by  change  of  temperature  resulting  from  the 
total  or  partial  destruction  by  fire,  or  by  lightning  (as  provided 
in  the  Consequential  Loss  and  Damage  Lightning  Clause  incor- 
porated herein),  of  refrigerating  or  cooling  apparatus,  connections 
or  supply  pipes,  or  by  the  interruption  by  fire,  or  by  lightning 
(as  provided  in  the  Consequential  Loss  and  Damage  Lightning 
Clause  incorporated  herein),  of  refrigerating  or  cooling  processes, 
in  the  above  described  building,  or  any  of  the  following  buildings: 

(here  give  the  location  of  the  refrigerating  plant,  or  any 

other  buildings  through  which  the  supply  pipes,  connections,  or 
other  apparatus  pass,  and  which  if  destroyed  or  damaged  by  fire 
or  lightning  might  disable  them) 

2 — That  the  liability  assumed  by  this  company  hereunder  shall 
be  only  such  proportion  of  the  actual  loss  and  damage  hereunder 
as  the  amount  insured  under  this  policy  bears  to  the  total  value  of 
the  property  insured  hereunder. 

Consequential  Loss  and  Damage  Lightning  and  Electrical 
Exemption  Clauses 
Consequential  Loss  and  Damage  Lightning  Clause. — Except  as 
provided  in  the  Consequential  Loss  and  Damage  Electrical  Exemp- 
tion Clause  incorporated  herein,  this  policy  shall  cover  such  conse- 
quential loss  or  damage  (as  defined  in  this  policy)  to  the  property 
insured  hereunder,  not  exceeding  the  sum  insured  under  this  policy, 
nor  the  interest  of  the  assured  in  the  property,  as  may  be  caused 
by  lightning  (meaning  thereby  the  commonly  accepted  use  of  the 
term  lightning,  and  in  no  case  to  mean  cyclone,  tornado  or  wind- 
storm), and  subject  in  all  other  respects  to  the  terms  and  condi- 
tions of  this  policy.  Provided,  however,  if  there  shall  be  any 
other  consequential  loss  or  damage  insurance  on  said  property,  this 
company  shall  be  liable  only  pro  rata  with  such  other  insurance 
for  any  consequential  loss  or  damage  by  lightning,  whether  such 
other  insurance  be  against  consequential  loss  or  damage  by  light- 

I^Bing  or  not. 

v^m  Consequential  Loss  and  Damage  Electrical  Exemption  Clause. 

I^B>-It  is  a  special  condition  of  this  insurance  that  this  company  shall 


274:  THE  AGENTS    KEY   TO   FIRE   INSURANCE 

this  policy)  to  the  property  insured  hereunder  caused  by  change 
of  temperature  resulting  from  damage  to  dynamos,  exciters,  lamps, 
switches,  motors  and  other  electrical  appliances  or  devices,  caused 
by  electrical  currents  whether  artificial  or  natural  (including 
lightning). 

CONSEQUENTIAL  LOSS  AND  DAMAGE  FORM  NO.  2 

(Two  Source  Equipment) 
{Uniformity  West) 

This  form  is  the  same  as  the  foregoing,  with  the  addition  of  the 
following  provision: 

That,  in  consideration  of  the  reduced  rate  of  premium  charged, 
there  shall  be  maintained  at  least  two  separate  and  complete  plants 
for  furnishing  refrigeration,  both  being  under  the  control  of  the 
owners  or  lessees  of  the  building  containing  the  property  insured, 
to  be  kept  in  readiness  at  all  times  for  instant  use,  and  each  of 
sufficient  capacity  to  answer  all  demands  should  one  refrigerating 
plant  be  damaged  or  destroyed. 

COLD  STORAGE  MERCHANDISE  FORM 

(Outside  Parties) 

$ On   merchandise   and  packages   therefor,  belonging  to  the 

insured,  or  in  which  the  insured  has  an  interest  to  the  extent 
thereof,  or  for  which  the  insured  may  be  liable,  while  contained, 
etc. 

(Attach  usual  or  required  clauses.) 

FUR  STORAGE  FORM 

$ On  furs,  fur  garments  and  other  property  held  on  storage 

or  for  repair  and  on  the  value  of  labor  performed  or  materials 
expended   thereon,    together   with    all    accrued   charges,    advances, 

liens  and  claims  on  such  property,  while  contained  in  the 

building,  occupied  principally  for purposes  and  situate 

In  case  of  loss  upon  property  held  by  the  insured  on  storage  or 
for  repairs,  on  which  a  limitation  as  to  liability  of  the  insured 
to  the  owner  or  owners  for  loss  by  fire  shall  have  been  fixed  or 
agreed  upon,  by  the  issue  of  receipt  or  otherwise,  it  is  agreed  that 
the  "actual  cash  value"  of  such  property  shall  in  no  case  exceed 
the  amount  of  such  limit  of  liability  so  fixed  or  agreed  upon;  and 
the  optional  right  of  this  Company  to  take  the  whole  or  any  part 
of  such  property,  provided  for  in  lines  4  and  5  of  said  printed 
conditions  (as  thus  interpreted),  shall  be  secured  to  this  Com- 
pany by  the  insured,  on  demand,  or  claim  for  loss  thereon  wholly 
waived. 

(Attach  usual  or  required  clauses.) 


ELEVATORS,    WAREHOUSES    AND    CONTENTS  275 


FUR  STORAGE  FORM 

$....On  furs,  fur  garments  and  other  property  held  in  storage 
to  the  extent  of  the  agreed  liability  of  said  insured  therefor, 
which  agreed  liability  is  hereby  taken  and  accepted,  on  proof 
thereof,  as  the  amount  for  which  this  Company  shall  be  liable  in 
case  of  loss  or  damage;  and  on  the  value  of  labor,  repairs  and 
alterations  performed  thereon. 

Amounts  stipulated  in  receipts  issued  by  the  insured  for  property 
held  on  storage  or  otherwise  as  the  agreed  liability  of  said  insured 
shall  be  taken  and  accepted  by  this  Company  as  the  actual  value 
of  said  property,  but  this  condition  shall  not  apply  to  any  goods 
or  articles  for  which  such  receipts  have  not  been  issued;  provided, 
however,  that  goods  and  articles  received  on  memorandum,  await- 
ing valuation  and  other  particulars  prior  to  receipts  being  issued, 
shall  be  held  covered  against  loss  or  damage  for  five  days  subject 
to  the  usual  conditions  of  the  policy  where  no  value  is  named. 
The  said  agreed  liability  shall  also  be  taken  and  accepted  as  the 
"ascertained  or  appraised  value"  of  said  property  referred  to  in 
the  printed  conditions  of  this  policy. 

In  accordance  with  the  conditions  of  this  policy  this  Company, 
upon  paying  the  amount  of  such  stipulated  liability  on  any  article 
or  articles  upon  which  damage  is  claimed,  shall  be  entitled  to  the 
remains  or  salvage  of  such  article  or  articles.  Failure  on  the 
part  of  the  insured  to  surrender  to  the  Company  the  remains  or 
salvage  of  any  such  article  or  articles  shall  waive  or  forfeit  all 
claim  under  this  policy  for  loss  or  damage  on  such  article  or 
articles. 

(Attach  usual  or  required  clauses.) 

GENERAL  STORAGE  WAREHOUSE  BUILDING 
FORM 

On  the  brick  and  frame  buildings  connecting  and  communicat- 
ing, including  all  additions,  attachments,  extensions,  connections, 
improvements,  platforms  and  permanent  equipment,  heating  and 
lighting  apparatus,  electrical  equipment,  sprinkler  equipment,  fire 
appliances,  piping,  plumbing,  signs,  screens,  and  awnings  (in  and 
on  buildings),  elevators,  motors,  and  all  machinery,  furniture  and 
fixtures,  fittings,  tools,  implements,  utensils,  and  supplies,  belonging 
to  said  building  and  comprising  its  operating  equipment,  occu- 
pied as  a  general  storage  warehouse  and  for  purposes  not  more 
hazardous,  situate 

(Attach  usual  or  required  clauses.) 

(GENERAL    STORAGE   WAREHOUSE    CONTENTS 
FORM 
'                                   {Operator's  Insurance) 
(....On  personal  property  consisting  principally  of and 


276  THE  AGENTS    KEY   TO   FIRE   INSURANCE  ' 

i 
on  packages  containing  the  same,  the  property  of  the  insured,  or  i 
in  which  the  insured  has  an  interest  to  the  extent  thereof,  or  for  I 
which  the  insured  is  legally  liable,  together  with  all  accrued  ' 
charges,   advances,   liens   and  claims  on  such  property;    all   while] 

contained  in  or  on  the building  and  additions  and  extensions  ! 

adjoining  and  communicating,  and  on  platforms  or  ground  adjacent  I 
thereto   while   in   process   of   loading   or   unloading,   occupied   for 
general  storage  purposes  and  situate 

This  policy  shall  not  cover  on  property  which  is  the  subject  of  i 
more  specific  insurance. 

(Attach  usual  or  required  clauses.)  \ 

PROPERTY  IN  WAREHOUSE  FORM  | 

(Owner  of  Property)  \ 

....On  personal   property  consisting  principally  of    ■ 

and  packages  for  or  containing  same,  while  contained  in  the \ 

building,    occupied   principally   for   general    storage    purposes    and  \ 

situate ; 

This  insurance  shall  not  be  invalidated  by  any  act  or  neglect '. 
of  any  occupant  of  the  within  described  premises,  providing  such  i 
act  or  neglect  is  not  within  the  control  or  knowledge  of  this ' 
insured  and  any  warranty  hereto  attached  shall  be  binding  upon  '■ 
this  insured  only  in  so  far  as  within  his  control  or  knowledge. 
(Attach  usual  or  required  clauses.)  ', 

ACCRUED  CHARGES  (WAREHOUSE)  FORM  ; 

$ On  accrued  charges  of  every  description  outstanding  against  ; 

goods,  merchandise  or  other  property,  contained  in  building  situate  ; 


This  insurance  protects  the  assured  against  loss  of  charges  ac- 
crued  at  the   time   of   the   happening  of   any   fire,    and   due   from  : 
parties  having  goods,  merchandise  or  other  property  stored  in  the  \ 
above    described    building,    which    property    shall    have    been    de-  : 
stroyed  or  damaged  by  fire. 

The  special  condition  of  this  insurance  is,  that  in  case  of  such  ; 
fire  causing  loss  or  damage  to  said  property,  this  company  shall  ] 
pay  to  the   assured   its   loss   upon   said  charges   upon   the   assured 
making  an   assignment  in  writing  to  the  companies  carrying  this 
insurance,    of   their    claim    or    claims    against    the    parties    storing 
said  property. 

For  the  purpose  of  securing  the  collection  of  these  charges  in  case 
of  fire,  the  assured  hereby  covenants  and  agrees  to  place   a   lien 
upon  the  companies  insuring  properties  on  which  said  charges  are  i 
due,  where  such  companies  are  known  to  the  assured.  r 

It  is  understood  and  agreed  that  this  company  shall  not  be  f 
liable  for  loss  on  that  portion  of  said  accrued  charges  which  arc  l 
due  for  a  longer  period  than  two  years.  " 

(Attach  usual  or  required  clauses.) 


DIVISION  VIII  i 

j 

MANUFACTURING  BUILDINGS  AND  THEIR    j 
CONTENTS  j 

Insurance  on  this  class  of  property  usually  covers,  sepa-i 
rately ;  the  building,  the  machinery,  and  the  stock,  although  ; 
they  may  all  be  written  in  one  item,  blanket,  with  coinsurance  j 
in  most  States.  ' 

Policies  covering  manufacturing  property  usually  contain' 
the  following  permits  and  clauses,  worded  in  accordance  with  < 
local  underwriting  rules :  i 

Other  Insurance,  Lightning,  Dynamo,  Electric  or  other 
Lighting  that  may  be  required.  Kerosene  Oil  Stove,  Me-j 
chanics.  Work  and  Materials;  also  Cease  Operations  and 
Vacancy  or  Unoccupancy  as  permitted,  together  with  such] 
other  clauses  as  may  be  necessary  or  desirable,  or  as  may| 
be  required  by  local  underwriting  rules.  j 

Care  should  be  exercised  that  permit  be  granted  for  gaso-j 
line  or  benzine,  if  used,  or  for  automobiles,  if  any,  for  these; 
things  are  common  in  many  such  risks.  (See  also  Special' 
Agreements.)  ! 

The  forms  given  are  intended  for  use  in  insuring  any  kind; 
of  manufacturing  risk,  though  some  will  require  additional 
or  special  wording  or  cover  to  fit  specific  needs.  In  manyj 
States  the  wording  of  the  forms  is  prescribed  and  no  other  j 
may  be  used.  ] 

MANUFACTURING  BUILDING  FORM  i 

{For  Any   Occupancy)  i 

$....0n   building   and/or    additions,    principally    of con-j 

struction  and  all  permanent  fixtures  attached  thereto  and/or  con-' 
tained  therein,  including  lighting,  heating,  plumbing  and/or  venti-; 
lating  apparatus  (stationary  vaults  and/or  safes),  machinery  used; 
to  operate  elevators,  for  heating  and/or  other  purposes  not  con- 
nected with  manufacturing,  millwright  work,  partitions,  divisions,! 
elevators,  dumb-waiters,  stairways,  platforms,  telephone  systems, 
annunciators,  speaking  tubes,  decorations,  signs,  awnings,  screens,' 
and/or  storm  doors,  and  all  other  building  equipment,  apparatus,'! 
and/or  appurtenances,  even  though  not  specifically  mentioned, 
whether  in  place,  contained  in,  attached  to  the  outside,  and/or  onj 

roof  of  building  and/or  additions,  occupied  principally  for ■ 

purposes,  situate ! 

(Add  usual  clauses.)  ■ 

277  \ 


278  THE  AGENTS    KEY   TO   FIRE   INSURANCE 

MANUFACTURING   BUILDING   FORM 

(For  any   Occupancy) 

$ On  the buildings,  additions  and  extensions  adjoin- 
ing and  communicating,  situate 

This  policy  also  covers  engines,  boilers,  dynamos,  motors,  tanks, 
pumps,  setting,  connections,  sprinkler  system,  main  line  of  shaft- 
ing, pulleys,  hangers,  heating,  lighting,  ventilating  and  electric 
apparatus,  and  such  equipment,  apparatus,  fixtures  and  connections 
as  pertain  to  the  service  of  the  building  or  the  furnishing  of  power 
therein,  ranges,  steam,  gas  and  water  pipes,  elevators,  hoists  and 
all  appurtenances  and  connections  thereto,  decorations,  frescoes, 
stairs,  stained,  plate  and  other  glass,  lettering,  signs,  awnings, 
storm  doors,  windows  and  screens,  burglar  alarm,  mirrors,  stoops, 
flag  poles,  sidewalks,  flagging,  railings,  grating,  privies,  fences, 
yard  fixtures,  vaults  under  sidewalk,  and  all  permanent  fixtures 
therein  and  thereto  said  buildings,  additions  and  extensions, 
occupied  principally  for 

MACHINERY  AND   STOCK   FORM 

{For   Use   When   Insuring    Tenant) 

$....0n  machines  and  machinery  of  every  description,  fixed  and 
movable,  including  engines,  boilers,  d3'namos,  motors,  parts,  at- 
tachments and  appurtenances  of  same,  hangers,  shafting,  pulleys, 
belting,  mill  work,  tools,  implements,  utensils,  supplies  and  equip- 
ment generally,  and  on  office  furniture,  fixtures,  and  equipment 
of  every  description,  including  desks,  chairs,  counters,  parti- 
tions, divisions,  typewriting,  duplicating  and  adding  machines, 
safes,  stationery,  advertising  matter,  catalogues,  signs,  awnings, 
screens  and/or  storm  doors,  and  all  other  plant  equipment,  ap- 
paratus and/or  appurtenances  even  though  not  specifically  men- 
tioned, and 

$....0n    stock    of    every    description,    consisting    principally    of 

manufactured,    unmanufactured    and/or    in 

process  of  manufacture,  including  all  articles,  materials  and/or 
supplies  used,  carried  and/or  kept  by  the  assured,  even  though  not 
specifically  mentioned,  and  packages  for  and/or  containing  same, 
all    while   contained   in,    attached   to   the   outside    and/or   on    roof 

of  the building  and  additions  adjoining  and  communicating, 

occupied  for purposes,  situate 

(Add  usual  clauses.) 

MACHINERY  AND   STOCK  FORM 

$ On  engines,  boilers,  dynamos,  motors,  machines,  machinery, 

forges,  flasks,  cranes,  tramways,  connections,  millwright  work,  set- 
tings, steam,  gas  and  water  pipes,  gas  and  electric  fixtures,  heating 
apparatus,    shafting,    belting,    pulleys,    patterns,    hangers,    pumps, 


MANUFACTURING   BUILDINGS   AND   CONTENTS         279 

tanks,  vats,  retorts,  conveyors,  scales,  moulds,  trucks,  presses,  type, 
cameras,  lenses,  plates,  halftones,  electrotypes,  stereotypes,  wood 
cuts  and  process  cuts,  dies,  lasts,  machinery  supplies,  fuel,  machinery 
repairs  and  labor  thereon,  meters,  solutions,  models,  factory,  office 
and  other  furniture  and  fixtures  of  every  description,  shelving, 
carpets,  matting,  shades,  partitions,  show  cases  and  show  figures 
(inside  and  outside),  lettering,  pictures,  clocks,  awnings,  signs, 
iron  safes,  stationery,  typewriting  machines,  telephones  and  con- 
nections, blowers,  advertising  matter,  designs,  drawings,  trunks, 
tools,  implements,  scientific  and  other  instruments,  apparatus,  uten- 
sils, appliances  and  appurtenances  and  all  other  property  not 
heretofore  mentioned  or  otherwise  insured  (including  also  im- 
provements and  betterments  to  buildings  where  buildings  are  not 
owned  by  assured)  ;  and 

$ On   stock,   samples,   materials   and   supplies,   manufactured, 

unmanufactured  and  in  process  of  manufacture,  including  cases, 
boxes,  labels  and  packages,  and  on  other  merchandise,  in  all 
stages.  Under  the  respective  items  this  policy  shall  cover  property 
of  the  assured,  or  in  which  the  assured  may  have  an  interest  not 
stated  herein  to  the  extent  of  such  interest,  or  for  which  the 
assured  may  be  liable;  and  on  the  property  of  others  held  on  stor- 
age or  for  repairs,  for  which  the  assured  may  be  liable;  also  for 
labor  performed  on  same;  all  contained  in,  on,  under  and  about 
the  buildings,  additions,  extensions  adjoining  and  communicating, 
and  sidewalks,  situate and  occupied  principally  for 

It  is  understood  and  agreed  that  particular  machines  and/or  mo- 
tors and/or  the  property  of  others,  or  any  other  articles  or  property 
above  enumerated  on  which  there  is  specific  insurance  are  not 
covered  by  this  policy. 

It  is  understood  and  agreed  that  bituminous  coal  in  the  open  is 
not  covered  under  this  polic}'. 

It  is  understood  that  where  the  buildings  above  described  are 
owned  by  the  assured  that  such  of  the  above  described  property 
as  may  be  enumerated  under  the  building  policies  is  not  covered 
by  this  policy. 

It  is  understood  and  agreed  that  not  more  than  15%  of  the 
amount  of  the  first  item  shall  cover  on  patterns  and  dies. 

GENERAL  MANUFACTURING  FORM 

$ On  the  chiefly  brick  and/or  frame  building,  additions,  ex- 
tensions adjoining  and  communicating,  including  boilers,  engines, 
and  heating,  hoisting,  plumbing,  lighting  and  power  fixtures  and 
appurtenances,  shafting,  belting,  pulleys,  hangers,  motors  and 
other  apparatus,  or  parts  thereof,  or  attachments  thereto,  pertain- 
ing to  the  service  of  the  building  and  the  furnishing  of  power 
therein,  or  other  fixtures  that  are  a  part  of  the  realty,  therein, 
thereon  or  attached  thereto;   sidewalks,  fences  and  yard  fixtures; 

situate  and  known  as ,  and  used  for ,  or  purposes 

not  more  hazardous. 


280  THE  AGENTS   KEY   TO   FIRE   INSURANCE 


$....0n  machines  and  machinery,  tools,  apparatus  and  appurte- 
nances, and  all  other  personal  property,  whether  required  by  the 
terms  of  this  policy  to  be  specifically  mentioned  or  not,  except  (a) 
that  covered  under  item  one  as  part  of  the  realty,  (b)  that  covered 
under  item  three  as  part  of  the  stock  and  (c)  that  specified  in 
line  38  of  this  policy;  and/or  the  interest  of  the  assured,  if  any, 
in  machinery  held  on  storage,  or  for  repairs,  or  on  consignment  or 
royalty,  or  lease,  or  for  which  the  assured  may  be  legally  liable; 
and  on  labor  performed  and  for  materials  used  thereon;  all 
while  contained  on  premises  as  described  in  first  item. 

Not  more  than %  of  this  item  shall  cover  on  patterns. 

$ On   stock,   materials    and   supplies   in   all   stages,   including 

samples,  labels,  cartons,  cases,  advertising  matter  and  stationery, 
their  own  or  the  property  of  others  for  which  they  are  legally 
liable,  or  in  which  they  have  an  insurable  interest  not  stated  herein 
to  the  extent  of  such  interest;  and  on  labor  performed  and/or 
materials  used  thereon;  all  while  contained  on  premises  as  described 
in  first  item. 

Special  Conditions. — This  policy  does  not  cover  stock  or  other 
property  specifically  insured  unless  the  value  thereof  exceeds  the 
specific  insurance  and  in  that  event  for  the  amount  of  such  excess 
value  only. 

Exclusions. — This  policy  shall  not  be  held  to  cover  cost  of  exca- 
vations;  nor  foundations  of  any  building  below  the  level   of  the 
ground. 
Privileges  Extended  to  the  Assured. — To  do  such  work  and  to 

use   such   materials   as    are   usual   to   the   business   of ;   to 

operate  extra  hours,  or  all  night,  without  prejudice  to  this  insur- 
ance, it  being  agreed  that  a  competent  man,  other  than  the  regular 
watchman,  shall  have  supervision  and  make  regular  inspection  of 
those  rooms  m  which  shafting  and  belting  are  running,  and  where 
employees  are  not  at  work;  to  remain  vacant  not  exceeding  a  total 
of  thirty  days  during  the  life  of  this  policy;  for  other  insurance 
without  notice  until  required;  for  mechanics  to  be  employed  for 
ordinary  alterations  and  repairs  in  the  within  described  premises, 
but  this  shall  not  be  held  to  include  the  constructing  or  reconstruct- 
ing of  the  building  or  buildings,  or  additions,  or  the  enlargement  of 
the  premises. 

This  policy  covers  pro  rata  of  each  of  the  above  amounts,  aggre- 
gating $ 

Lightning  Clause. 
80%  Clause.    With  5%  Exemption. 
(Add  other  usual  or  required  clauses.) 

Note: — If  desired,  the  foregoing  may  be  used  as  a  blanket  form, 
covering  all  buildings  and  contents  of  a  plant  (but  separating 
them  into  three  items),  by  making  the  word  building  in  first  line 
plural  and  adding  the  following  distribution  clause: 

Each  item  of  this  policy  shall  attach  on  or  in  each  separate 
building  or  location  in  the  proportion  which  the  value  on  or  in 
each  bears  to  that  on  or  in  all. 


MANUFACTURING   BUILDINGS   AND   CONTENTS  281 

MANUFACTURING    SPECIAL    HAZARDS   FORM 

{Uniformity  IV est) 

This  policy  being  for  $....,  covers  its  pro  rata  proportion  of 
and  on  the  following  amounts  and  items: 

*1  $.  . .  .On  the story roof building,  occu- 
pied as 

*2  $.  .  .  .On  macliinery,  and 

*3  $ On  stock,   and 

*4  $....0n  patterns,  moulds,  models  and  forms;  all  only  while 
contained  in,  or  attached  to,  said  building. 

*5  $ On  the story roof building,  occu- 
pied as 

*6  $....0n  machinery,  and 

*7  $.  . .  .On  stock,   and 

*8  $....0n  patterns,  moulds,  models  and  forms;  all  only  while 
contained  in,  or  attached  to,  said  building. 

*9  $ On  the story roof building,  occu- 
pied as 

*10  $....0n  machinery,  and 

*11  $ On  stock,  and 

*12  $....0n  patterns,  moulds,  models  and  forms;  all  only  while 
contained  in,  or  attached  to,  said  building. 

*13  $....0n 

$.... Total  Insurance.  Average  Premium  Per  M.  $.... 

All     the     above     described     property    being     situated 

State  of 

*No  insurance  attaches  under  any  of  the  above  items  unless  a 
certain  amount  is  specified  and  inserted  in  blank  immediately 
preceding  the  item. 

The  words  "Building,"  "Machinery"  and  "Stock"  as  used 
herein  shall  be  construed  to  cover   as  follows: 

"Building" — On  building,  including  foundations,  plumbing,  elec- 
tric wiring  and  stationary  heating,  lighting  and  ventilating  appa- 
ratus and  fixtures  therein;  also  all  permanent  fixtures,  stationary 
scales  and  elevators,  belonging  to  and  constituting  a  part  of  said 
building. 

"Machinery" — On  fixed  and  movable  machinery  of  every  de- 
scription, engines,  boilers,  pumps,  dynamos,  electrical  machinery, 
apparatus,  appliances  and  devices,  including  their  settings,  con- 
nections, attachments  and  appurtenances;  fuel;  hose  and  other 
fire  extinguishing  appliances;  signs  and  awnings  (signs  and  awn- 
ings covered  under  fire  policies  only)  ;  drawings,  dies,  scientific 
apparatus;  pictures,  paintings,  engravings  and  their  frames,  all 
at  not  exceeding  cost;  factory  furniture,  fixtures,  equipment,  tools, 
implements,  utensils,  and  machinist's  supplies,  also  office  furniture, 


282                 THE  AGENTS   KEY   TO   FIRE  INSURANCE  j 

fixtures    and    supplies,    including    printed    books,    safes    and    type- 
writers. ^ 

"Stock" — On    merchandise    and    materials,    manufactured,    un-  j 

manufactured,   and   in  process  of  manufacture,   including   all   ma-  , 

terials  and  supplies  used  in  packing  and  preparing  same  for  ship-  j 

ment;    and   provided   the    assured   is    legally   liable   therefor,    this  ■ 
item  shall   also  cover  such  stock  held  in  trust,  or  on  commission, 
or  sold  but  not  delivered. 

The  items  on  "Machinery,"  "Stock,"  and  "Patterns,  moulds,  models  j 

and  forms,"  shall  also  cover  said  "Machinery,"  "Stock,"  and  "Pat-  , 

terns,  moulds,  models  and  forms"  within  one  hundred  (100)  feet  of  ' 

the   above  described  buildings  while  on  sidewalks,  streets,  alleys,  j 
yards,  detached  platforms  and  in  or  on  vehicles  or  railway  cars; 

also  on  said  "Machinery,"  "Stock,"  and  "Patterns,  moulds,  models  ; 

and   forms"   while   on   platform   in   contact   with    above    described  j 
buildings;    all   only  while   in  transit  to   and  from  said  buildings.  .- 

Permission  granted  for  such  use  of  the  premises  as  is  usual  and  ' 

incidental     in     the     business,     as     conducted     therein,     of I 

(state  kind  of  business) and  when  not  in  violation  of  any  i 

law,  statute  or  municipal   restriction,  to  keep  and  use  all   articles  ! 

and    materials    usual    and    incidental    to    said    business,    in    such  i 
quantities   as  the  exigencies  of  the  business  require. 

(Attach  usual  and  required  clauses.) 

BLANKET  MACHINERY  AND   STOCK  FORM   (MFG.)  ] 
(Illustration) 

On   the    entire    contents    of   the    buildings   occupied   by    assured,  i 

consisting    largely    of    automobiles    and    parts    thereof,    machinery  j 

•and  equipment,  situated  and  known  as  Nos ; 

This   insurance    also   covers    such,  property   as   is   insured   here-  , 
under  when  outside  of  buildings  described  herein,  but  not  beyond 

100  feet  from  the  premises  unless  otherwise  stated  herein.  \ 

Other  insurance  permitted.  { 

This   policy  includes   property   as   described   and  also  all   other  ";. 

property   insurable    under    the    conditions   of   this   policy,   whether  j 

specifically    mentioned    herein    or    not,    if    same    forms    part    of  j 

assured's  stock  or  equipment  insured  hereunder  or  is  appurtenant  ^ 

thereto.  | 

(Add  usual  clauses.)  i 

BLANKET  FORM  (MANUFACTURING)  •; 

$ On  all  property,  both  real  and  personal  (including  property  j 

specifically  enumerated  in  the  policy  on  which  liability  is  required  ; 

to  be  specifically  assumed,  but  excluding  accounts,  bills,  currency,  j 
deeds,  evidences  of  debt,  money,  notes,  or  securities),  belonging  to 
the  insured  and  on  the  insured's   interest  in   and/or   liability  for 


MANUFACTURING   BUILDINGS   AND    CONTENTS         283 

property  held  by  the  insured  on  storage,  or  for  repairs,  or  other- 
wise, and  belonging  in  whole  or  in  part  to  others;  also  for  labor 
performed  or  materials  expended  thereon.  All  while  contained  on 
his    premises,    occupied    principally    for purposes,    situate 


Attach  clauses  shown  under  "Special  Agreements"  numbered 
1,  2,  3,  4,  5,  6,  7,  8  and  10;  also  Electric  or  other  Lighting  that 
may  be  required,  Mechanics,  and  Cease  Operations,  Vacancy  and/ 
or  Unoccupancy  as  permitted,  together  with  such  other  clauses  as 
may  be  necessary  or  desirable,  or  as  may  be  required  by  local 
rules. 

(See  also  Blanket  Policies.) 

PRINTERS'  FORM 

$ On  patterns,  moulds,  models,   matrices,   drawings,   designs, 

dies,  solutions,  photographic  negatives,  and  lithographic  plates  and 
stones,  and  engravings  thereon;  the  property  of  the  assured,  or 
held  by  the  assured  in  trust,  or  the  property  of  others  for  which 
the  assured  may  be  liable,  including  labor  performed  on  same; 
and 

$ On  engines,  boilers,  dynamos,  motors,  machines,  machinery, 

forges,  flasks,  cranes,  tramways,  connections,  millwright  work,  set- 
tings, steam,  gas  and  water  pipes,  gas  and  electric  fixtures,  heating 
apparatus,  shafting,  belting,  pulleys,  hangers,  pumps,  tanks,  vats, 
retorts,  conveyors,  scales,  trucks,  presses,  type,  cameras,  lenses, 
lasts,  machinery  supplies,  fuel,  machinery  repairs  and  labor  there- 
on; pounces,  cutters,  knives,  stencils,  imposing  stones  and  frames, 
blocks,  brass  stamps  and  gilding  tools;  and  on  plans,  sketches, 
stereotypes,  electrotypes,  cuts,  plates  (other  than  lithographic), 
wood  cuts,  half-tones  and  work,  labor  and  engravings  thereon; 
meters,  factory,  office  and  other  furniture  and  fixtures  of  every 
description,  shelving,  carpets,  matting,  shades,  partitions,  show 
cases  and  show  figures  (inside  and  outside),  lettering,  pictures, 
clocks,  awnings,  signs,  iron  safes,  stationery,  typewriting  machines, 
telephones  and  connections,  blowers,  advertising  matter,  trunks, 
tools,  implements,  scientific  and  other  instruments,  apparatus,  uten- 
sils, appliances  and  appurtenances,  and  all  other  property  not 
heretofore  mentioned  or  otherwise  insured  (including  also  im- 
provements and  betterments  to  buildings  where  buildings  are  not 
owned  by  assured)  ;  and 

$....0n  Stock,  Samples,  Materials  and  Supplies,  manufactured, 
unmanufactured  and  in  process  of  manufacture,  including  cases, 
boxes,  labels  and  packages,  and  on  other  merchandise,  in  all 
stages.  Under  the  respective  items  this  policy  shall  cover  property 
of  the  assured,  or  on  joint  account  with  others,  or  sold  but  not 
delivered  or  removed,  or  for  which  the  assured  may  be  liable;  and 
on  property  of  others  held  on  storage  or  for  repairs,  for  which  the 
assured  may  be  liable;  also  for  labor  performed  on  same;  all  con- 


I 

284  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

tained  in,  on,  under  and  about  the  buildings,  additions,  extensions 
and  sidewalks,  situate:  No 

It  is  understood  and  agreed  that  property  enumerated  under 
first  item  is  not  covered  under  second  item  of  this  policy. 

It  is  understood  and  agreed  that  where  the  buildings  above  de- 
scribed are  owned  by  the  assured  that  such  of  the  above  described 
property  as  may  be  enumerated  under  the  building  policies  is  not 
covered  by  this  policy. 

It  is  understood  and  agreed  that  particular  machines  and/or 
motors  and/or  the  property  of  others,  or  any  other  articles  or 
property  above  enumerated  on  which  there  is  specific  insurance 
are  not  covered  by  this  policy. 

(Add  usual  clauses.) 

PRINTING  OFFICE  FORM 

{Uniformity  West) 

*1  $....0n  printing  presses  and  connections,  machines,  machin- 
ery; electrical  apparatus,  appliances  and  devices;  brass  rules, 
stands,  cases,  galleys,  chases,  type,  slugs;  metal  and  wood  furni-l 
ture;  imposing  stones  and  frames,  racks,  cabinets;  electrotypes,-: 
stereotypes,  woodcuts,  electrotype  and  stereotype  blocks,  plates,  | 
cuts;  paper  cutters  and  connections,  tables,  tools,  shafting,  belting,  ^^ 
gearing,  hangers,  pulleys,  inks,  rollers;  store  and  office  furniture, | 
fixtures,  printed  books  and  supplies,  counters,  shelving,  show  cases,| 
scales,  desks,  safes,  typewriters,  cash  registers;  pictures,  paintings* 
and  engravings,  including  their  frames,  all  at  not  exceeding  cost; 
lighting  fixtures,  stoves,  signs  and  awnings  (signs  and  awnings! 
covered  under  fire  policies  only)  ;  and  all  other  tools,  implements] 
and  utensils  as  are  usually  kept  in  printing  establishments;  alll 
not  belonging  to  and  constituting  a  permanent  part  of  the  building;: 
also  on  stock  of  paper,  plain,  printed  and  in  process  of  printing,! 
and  such  other  merchandise  and  materials  as  are  usually  kept  inf 
printing  establishments;  and,  provided  the  assured  is  legally  liable^ 
therefor,  this  item  shall  also  cover  such  merchandise  and  materiall 
held   in   trust,   or   on   commission,   or   sold   but  not   delivered;    allj 

only  while  contained  in,  or  attached  to,  the story 

roof building,  situated 

*2  $....0n 

*No  insurance   attaches  under  any  of  the   above  items  unless 
certain    amount    is    specified    and    inserted,  in    blank    immediately 
preceding  the  item.  \ 

(Attach  usual  clauses.) 

MERGENTHALER   LINOTYPE   CO.   FORM 

(Used  where  their  machines  are  insured  while  in  the  hands  of 

others.) 
$ On  Linotype  Machines,  including  all  parts  of  and  appurte- 
nances  to   same,   while   contained   in   the buildings    situate-^ 

i 
] 


MANUFACTURING   BUILDINGS   AND   CONTENTS  285 

Loss,  if  any,  first  payable  to  the  Mergenthaler  Linotype  Co.,  as 
its  lien  or  mortgagee  interest  may  appear. 

Privileged  to  work  overtime  and  at  night,  to  cease  operations, 
to  use  oil  stoves,  to  use  electricity  for  light,  heat  and/or  power,  to 
make  alterations,  additions  and  repairs,  and  this  policy  to  cover 
therein,  to  do  such  work,  and  to  use  such  materials  as  are  usual 
in  the  business  of  printers,  and  for  other  insurance. 

This  policy  shall  cover  any  direct  loss  or  damage  caused  by 
Lightning  (meaning  thereby  the  commonly  accepted  use  of  the 
term  Lightning  and  in  no  case  to  include  loss  or  damage  by  cyclone, 
tornado  or  wind-storm),  not  exceeding  the  sum  insured,  nor  the 
interest  of  the  insured  in  the  property,  and  subject  in  all  other 
respects  to  the  terms  and  conditions  of  this  policy.  Provided,  how- 
ever, if  there  shall  be  any  other  insurance  on  said  property,  this 
Company  shall  be  liable  only  pro  rata  with  such  other  insurance 
for  any  direct  loss  by  Lightning,  whether  such  other  insurance 
be  against  direct  loss  by  Lightning  or  not. 

PRINTERS'  OR  LITHOGRAPHERS*   FORM 

$ On   presses,   motors,  machines,   mills,   machinery,    shafting, 

belting,  pulleys,  hangers,  piping,  tubing,  type,  electrotypes  and 
labor  performed  in  setting  type,  tools,  implements,  utensils,  appurte- 
nances and  machinery  supplies,  and  on  electric  and  gas  apparatus 
and  fixtures,  and  on  photographic  apparatus,  supplies  and  fixtures, 
photographic  positives  and  transparencies;  and  on  office  and  fac- 
tory furniture  and  fixtures,  signs,  fresco  work,  wall  and  ceiling 
decorations,  iron  safes,  stationery,  office  supplies,  slates,  tubes, 
metal  plates,  pictures,  paintings  and  their  frames  and  shadow 
boxes;  and  on  framed  and  unframed  specimens,  progressive  proofs, 
prints,  photographs,  books,  art  publications,  and  manuscript,  and 
on  paper,  card  board,  muslin,  satin  and  other  materials,  printed 
and  unprinted  with  the  work  thereon,  finished  or  unfinished,  and 
on  goods  in  stock,  or  sold  but  not  removed,  whether  paid  for  or 
not,  and  on  inks,  colors,  varnish,  bronzes,  metal  leaf,  and  other 
supplies,  and  on  all  other  contents  of  whatever  nature  not  other- 
wise insured. 

$ On  patterns,  models,  moulds,  matrices,  drawings,   designs, 

dies,  solutions,  photographic  negatives  and  copper  cylinders  coat- 
ed with  zinc  or  uncoated,  used  as  a  lithographic  or  gravure  print- 
ing surface,  lithographic  plates  and  stones  and  engravings  and 
drawings  thereon,  sketches,  drawings,  pictures,  paintings,  and  de- 
signs, finished  or  unfinished  including  their  frames. 

This  policy  shall  cover,  under  the  respective  items,  the  interest 
of  the  insured  in  and/or  liability  for  similar  property  held  on 
storage,  or  for  repairs,  or  otherwise,  and  belonging  in  whole  or 
in  part  to  others. 


286  THE  AGENTS    KEY  TO   FIRE  INSURANCE  ^ 

CLOTHING  MANUFACTURING  FORM 

{In  hands  of  other  parties) 

$....0n  their  clothing,  manufactured  and  in  process,  including 
labor  of  employees,  and  all  materials  and  supplies  used  in  making 

and/or  repairing  the  same,  while  contained  in  the building, 

occupied  as  a situate said  stock  held  by for 

manufacturing  purposes. 

Other  insurance  permitted. 

This  insurance  is  against  only  loss  or  damage  by  fire  to  property 
contained  in  premises  above  described,  and  does  not  cover  any 
loss,  direct  or  consequential,  to  property  in  any  other  location. 

CLOTH  SPONGERS'  FORM 

$....0n  woolens  and  other  merchandise  not  hazardous,  hazard- 
ous and  extra  hazardous,  finished,  unfinished  or  in  the  process  of 
finishing,  sponging,  manufacturing  or  examining  (including  cost 
of  labor  expended  thereon)  the  property  of  the  assured  or  held  in 
trust  or  on  commission  or  on  joint  account  with  others,  or  sold 
but  not  delivered  or  removed,  all  while  contained  in  or  on  build- 
ings, extensions,  and  additions  thereto  and  in  vaults  and  under  the 
sidewalks  of  the  premises  of  the situate 

This  policy  is  issued  with  the  understanding  and  agreement  on 
the  part  of  the  company  to  issue  certificates  of  insurance  to  any 
firm  or  firms,  having  merchandise  in  the  above  mentioned  prem- 
ises as  shall  be  requested  by  the  assured  or  their  representatives 
for  amounts  not  exceeding  in  the  aggregate  the  total  amount  of 
the  policy  and  not  to  extend  beyond  the  expiration  thereof. 

It  is  further  understood  and  agreed  that  such  certificates  shall 
form  a  part  of  this  policy  contract  and  be  subject  to  all  its  condi- 
tions. 

It  is  understood  and  agreed  that  this  insurance  is  not  held  to 
include  merchandise  or  property  on  which  at  the  time  of  loss  there 
may  be  specific  insurance. 

(Attach  other  usual  or  required  clauses.) 

STOCK  IN  TANNERY  FORM 

{Operator's  Insurance) 

$ On  stock  of  hides,  skins  and  leather  in  all  stages,  and  on 

all  by-products  of  tanning,  such  as  hair,  grease  and  glue  stock, 
and  on  bark,  tanning  liquors  and  all  materials  and  supplies  used 
in  the  insured'*s  business,  while  contained,  etc. 

This  policy  also  covers  the  legal  liability  of  the  insured  for 
similar  property  belonging  in  whole  or  in  part  to  other  parties. 

(Attach  other  usual  or  required  clauses.) 


MANUFACTURING    BUILDINGS    AND    CONTENTS         287 

STOCK  IN  TANNERY  FORM 

{For  Outside  Parties) 

$ On  stock  of  hides,  leather,  skins  and  pelts,  manufactured, 

unmanufactured  or  in  process  of  manufacture,  including  all  ar- 
ticles and  materials  entering  into  the  same,  their  own  or  for  which 
they  may  be  liable  or  sold  but  not  removed,  while  contained,  etc. 

(Attach  usual  or  required  clauses.) 

STOCK  IN  TANNERY  FORM 

{For  Outside  Parties)    (2) 

$ On  their  divided  or  undivided  interest  in  stock  of  hides  and 

leather  of  all  kinds  in  all  stages  and  on  materials  and  supplies 
therefor,  while  contained,  etc. 

This  policy  shall  not  cover  property  more  specifically  insured 
except  for  the  excess  of  value,  if  any,  over  the  amount  of  such 
specific  insurance. 

(Attach  usual  or  required  clauses.) 

CREAMERY  OR  CHEESE  FACTORY  FORM 

{Uniformity  West) 
(For  Use  on  Either  Fire   or  Tornado  Policies) 

*1  $ On  the story roof building,  in- 
cluding foundations,  plumbing,  electric  wiring  and  stationary  heat- 
ing, lighting  and  ventilating  apparatus  and  fixtures  therein;  also 
all  permanent  fixtures,  stationary  scales  and  elevators,  belonging 
to    and    constituting    a    part    of    said    building;    occupied    as    a 

(state   whether   creamery  or  cheese   factory) 

situated 

*2  $....0n  boilers  and  engines,  pumps,  fixed  and  movable 
machinery,  including  foundations,  settings,  connections  and  at- 
tachments ;  separators,  vats,  steam  piping,  cans,  receivers  and 
containers;  electrical  apparatus,  appliances  and  devices;  tools, 
implements,  utensils,  scales  and  office  and  factory  furniture,  fixtures, 
printed  books  and  supplies;  all  only  while  contained  in  the  above 
described  building. 

*3  $. . .  .On  stock  of  milk,  cream,  butter,  cheese,  tubs,  paper,  linen, 
paper  circles,  rennet,  bandages,  color,  salt  and  such  other  material 
and  supplies  used  in  the  manufacture  and  preparation  of  the 
product  of  this  plant;  and,  provided  the  assured  is  legally  liable 
therefor,  this  item  shall  also  cover  such  merchandise  held  in 
trust,  or  on  commission,  or  sold  but  not  delivered;  all  only  while 
contained  in  the  above  described  building. 

This  item  shall  also  cover  said  merchandise  within  one  hundred 
(100)  feet  of  the  above  described  building  while  on  sidewalks, 
streets,    alleys,   yards,   detached   platforms   and   in    or   on   vehicles 


288  THE  AGENTS    KEY   TO   FIRE   INSURANCE 

or  railway  cars;  also  on  said  merchandise  while  on  platforms  in 
contact  with  above  described  building;  all  only  while  in  transit 
to  and  from  said  building. 

*4  $....0n........ 

*No  insurance  attaches  under  any  of  the  above  items  unless  a 
certain  amount  is  specified  and  inserted  in  blank  immediately 
preceding  the  item. 

(Attach  usual  clauses.) 

FERTILIZER  RISKS   (DRY  MIXING  PLANTS) 

(Buildings   and  Machinery — Specific) 
{S.  E.  U.  A.) 
Fertilizer    or    Phosphate    Co.,    situated 

$.  .  .  .On  their story,  frame roof  building,  includ- 
ing foundations,  partitiqns  and  platforms  adjoining  and  connected 
therewith,  while  occupied  by  assured  for  manufacturing  Fertilizers, 
known  as  Mixing  Building.  Building  No 

$....0n  their  fixed  and  movable  machinery,  including  crushers, 
mixers,  conveyors,  elevators,  sacking  machines,  blowers,  shafting, 
belting,  hangers,  connections,  tools  and  all  necessary  appurtenances 
and  appliances,  all  while  contained  in  the  Mixing  Building  above 
described. 

$....0n  their story roof  Boiler   House  Building, 

located feet  from  above  described  Mill  Building.    Building 

No 

$...,0n  their  engines,  boilers,  smokestack,  foundations,  pumps 
and  connections,  all  contained  in  the  Boiler  House  Building  above 
described. 

This  insurance  is  effected  subject  to  the:  following  conditions, 
which  are  accepted  as  parts  of  this  contract: 

Fire  Protection  Clause. — In  consideration  of  the  reduced  rate 
at  which  this  policy  is  written,  it  is  hereby  made  a  condition  of 
this  insurance  that  all  of  the  private  fire  protection,  for  which 
credit  is  given  in  the  rating  on  the  within  named  property,  shall 
at  all  times  be  kept  in  good  condition  and  complete  working  order, 
whether  it  be  fire-plug  and  hose,  with  spanner — or  casks  of  water 
and  fire-pails — or  watchman's  clock  and  records — or  fire-pump — 
or  any  other  kind  of  private  fire  protection;  and  assured  agrees 
that  in  event  of  failure  to  do  so,  this  policy  shall  be  null  and 
void,  unless  the  interruption  of  such  fire  protection  be  from 
circumstances  not  within  the  control  or  knowledge  of  the  assured, 
or  which  could  not  have  been  prevented  by  the  exercise  of  due 
diligence  on  the  part  of  the  assured. 
Warranted  by  the  Assured  : 

That  the  following  articles,  when  in  excess  of  one  day's  supply, 
shall  be  kept  and  stored  only  as  hereinafter  provided. 


MANUFACTURING    BUILDINGS    AND    CONTENTS         28'J 

1.  Garbage  Tankage  and  Fish  Scrap  (other  than  acidulated) 
AND  Wool  Waste  in  Bulk — (a)  In  an  approved  magazine  when 
in  Mixing  Building  or  Storage  Warehouse,  or  (b)  when  in  a 
standard  reinforced  concrete  building  outside  of  said  buildings, 
or  (c)  when  in  a  standard  brick  building  not  nearer  than  20 
feet,  or  (d)  when  in  a  frame  building  not  nearer  than  50  feet, 
or  (e)  shall  not  be  stored  in  Mixing  Building  or  Storage  Ware- 
house, unless  in  bags  tiered  in  piles  of  not  exceeding  in  width 
the  length  of  three  (3)  bags  with  at  least  two  (2)  feet  clear 
space  on  all  sides  and  above,  unless  permit  is  attached  to  this 
policy  and  an  additional  premium  paid  therefor. 

2.  Empty  Niter  Bags. — Will  at  no  time  be  allowed  to  be  kept  in 
Mixing  Building,  or  any  other  building,  excepting  in  Niter  House 
or  in  a  special  building  for  the  purpose,  detached  not  less  than 
20  feet  if  standard  brick  building,  or  50  feet  if  frame  building, 
unless  permit  is  attached  to  this  policy  and  an  additional  premium 
paid  therefor. 

Permission  Granted: 

(1)  To  make  ordinary  alterations,  additions  and  any  repairs 
needed,  but  it  is  understood  and  agreed  that  extraordinary  altera- 
tions or  additions  are  prohibited  without  notice  to  and  consent  of 
this  Company  in  writing.  (2)  To  operate  Mixing  Building,  also 
boilers  connected  therewith,  at  night  for  a  period  of  not  exceeding 
seventy-five  (75)  days  within  each  calendar  year.  (3)  To  have 
and  use  such  materials  not  named  in  warranty  as  are  usual  to  the 
prosecution  of  their  business.  (4)  To  cease  operation  during  the 
usual  vacation  incident  to  their  business  on  the  express  condition 
that  all  private  fire  protection  for  which  credit  is  given  in  the 
rating  on  the  within  named  property  shall  be  kept  in  good 
condition  and  complete  working  order,  and  that  a  watchman 
with  an  approved  watch-clock  shall  be  on  duty  day  and  night 
during  the  period  of  vacation,  except  it  is  understood  that, 
between  manufacturing  periods  when  employees  are  regularly 
working  on  premises,  plant  is  not  considered  "shut  down  and 
not  in  operation"  as  to  watchman's  service  and  in  such  cases 
day  watchman  is  not  required.  (5)  To  generate  and/or  use 
electricity  for  lights  and  power  when  the  electrical  equipment  is 
in  full  compliance  with  the  "National  Electrical  Code." 
(Attach  Lightning,  Dynamo  and  Standard  Time  Clauses.) 
Note: — In  every  case  where  the  co-insurance  clause  is  not  ap- 
plicable, the  three-fourths  value  clause  must  be  inserted.  When- 
ever the  three-fourths  value  clause  is  used,  the  total  amount  of 
insurance  allowed  must  be  stated  in  the  policy. 

FERTILIZER   RISKS    (FULL    PROCESS   PLANTS) 

(Buildings   and  Machinery — Specific) 

Fertilizer    or    Phosphate    Co.,    situated 

$....0n  their story,  frame. roof  building,  includ- 


290  THE  AGENTS   KEY   TO   FIRE   INSURANCE 

ing  foundations,  partitions  and  platforms  adjoining  and  connected 
therewith,  while  occupied  by  assufed  for  manufacturing  Fertilizers, 
known  as  Fertilizer  or  Dump  Shed  Building.    Building  No 

$....0n  their  fixed  and  movable  machinery,  including  crushers, 
mixers,  conveyors,  elevators,  sacking  machines,  blowers,  shafting, 
belting,  hangers,  connections,  tools  and  all  necessary  appurtenances 
and  appliances,  all  while  contained  in  the  Fertilizer  Factory  or 
Dump  Shed  Building  above  described. 

$ On  their story, roof  Boiler  House  Building, 

located feet  from  above  described  Mill  Building.    Building 

No 

$ On  their   engines,   boilers,   smokestack,   foundations,   pumps 

and  connections,  all  contained  in  the  Boiler  House  Building  above 
described. 

$..,.0n  their story,  frame roof  building,  includ- 
ing foundations,  partitions  and  platforms  adjoining  and  con- 
necting therewith,  while  occupied  by  assured  for  manufacturing 
Fertilizers,    known    as    Acid    Chamber    Building.      Building    No. 


$ On    lead    chambers    and    furnaces    and    all    appurtenances 

and  appliances  connected  therewith,  contained  in  the  above  de- 
scribed Acid  Chamber  Building. 

$.  . .  .On  their story, roof  Boiler  House  Building, 

located feet  from  the  above  described  Acid  Chamber  Build- 
ing.    Building  No 

$ On  their  boilers,  foundations,  pumps   and  connections,   all 

while  contained  in  the  above  described  Boiler  House. 

This  insurance  is  effected  subject  to  the  following  conditions, 
which  are  accepted  as  parts  of  this  contract: 

Warranted  by  the  Assured: 

That  the  following  articles  when  in  excess  of  one  day's  supply 
shall  be  kept  and  stored  only  as  hereinafter  provided: 

1.  Nitrate  of  Soda. —  (a)  In  an  approved  magazine  when  in 
Fertilizer  Factory  or  Dump  Shed,  Mill  or  Acidulating  Building 
or  Storage  Warehouse  and/or  Acid  Chamber  Building,  or  (b) 
when  in  a  standard  reinforced  concrete  building,  outside  of  said 
buildings,  or  (c)  when  in  a  standard  brick  building  not  nearer 
than  20  feet,  or  (d)  when  in  a  frame  building  not  nearer  than 
50  feet,  or  (e)  shall  not  be  kept  in  any  building  except  when 
stored  as  above  provided  unless  permit  for  same  is  attached  to 
this  policy  and  an  additional  premium  paid  therefor. 

2.  Garbage  Tankage  and  Fish  Scrap  (other  than  acidulated). 
—  (a)  In  an  approved  magazine  when  in  Fertilizer  Factory  or 
Dump  Shed,  Mill  or  Acidulating  Building  or  Storage  V^arehouse 
and/or  Acid  Chamber  Building,  or  (b)  when  in  a  stai  dard  re- 
inforced concrete  building  outside  of  said  buildings,  or   (c)    when 


MANUFACTURING   BUILDINGS   AND   CONTENTS         291 

in  a  standard  brick  building  not  nearer  than  20  feet,  or  (d)  when 
in  a  frame  building  not  nearer  than  50  feet,  or  (e)  shall  not 
be  stored  in  Fertilizer  Factory  or  Dump  Shed,  Mill  or  Acidulating 
Building,  or  Storage  Warehouse  and/or  Acid  Chamber  Building 
unless  in  bags  tiered  in  piles  of  not  exceeding  in  width  the  length 
of  three  (3)  bags  with  at  least  two  (2)  feet  clear  space  on  all 
sides  and  above,  unless  permit  is  attached  to  this  policy,  and 
an  additional  premium  paid  therefor. 

3.  Empty  Niter  Bags. — Will  at  no  time  be  allowed  to  be  kept 
in  Fertilizer  Factory  or  Dump  Shed,  Mill  or  Acidulating  Building 
or  Storage  Warehouse  and/or  Acid  Chamber  Building,  or  any 
other  building,  excepting  in  the  Niter  House,  or  in  a  special 
building  for  the  purpose  detached  as  specified  in  item  1  of  this 
warranty,  unless  permit  is  attached  to  this  policy  and  an  additional 
premium  paid  therefor. 
Permission  Granted: 

(1)  To  make  ordinary  alterations,  additions,  and  any  repairs 
needed,  but  it  is  understood  and  agreed  that  extraordinary  altera- 
tions or  additions  are  prohibited  without  notice  to  and  consent 
of  this  Company  in  writing.  (2)  To  work  Acid  Chambers  and 
furnaces  connected  therewith,  also  boilers  for  use  of  Acid  Cham- 
bers, at  night  if  necessary;  also  to  operate  Mill  or  Acidulating 
Building  and  Fertilizer  Factory  or  Dump  Shed  at  night  for  a 
period  of  not  exceeding  seventy-five  (75)  days  within  each  calendar 
year.  (3)  To  have  and  use  such  materials  not  named  in  warranty 
as  are  usual  to  the  prosecution  of  their  business.  (4)  To  cease 
operation  during  the  usual  vacation  incident  to  their  business  on 
the  express  conditions  as  follows:  (a)  That  all  private  fire 
protection,  for  which  credit  is  given  in  the  rating  on  the  within 
named  property,  shall  be  kept  in  good  condition  and  complete 
working  order,  except  it  is  understood  that  provided  there  is  a 
city  connection  of  standard  size  and  pressure  or  a  tank  of 
standard  capacity  and  elevation  as  a  source  of  water  supply  in 
addition  to  the  supply  from  fire-pumps  the  actual  maintenance  of 
steam  pressure  in  boilers  for  operating  fire-pumps  is  not  required 
but  the  boilers  for  operating  fire-pumps  will  be  kept  filled  with 
water  to  the  proper  level  and  fuel  properly  laid  in  boiler  furnaces 
ready  to  be  fired  for  quick  steaming  of  boilers  at  all  times 
during  the  period  of  vacation,  (b)  That  a  watchman  with  an 
approved  watch-clock  shall  be  on  duty  day  and  night,  during 
the  period  of  vacation,  except  it  is  understood  that  between  manu- 
facturing periods  when  employees  are  regularly  working  on  prem- 
ises, plant  is  not  considered  "shut  down  and  not  in  operation" 
as  to  watchman's  service  and  in  such  cases  day  watchman  is 
not  required.  (5)  To  generate  and/or  use  electricity  for  lights 
and  power  when  the  electrical  equipment  is  in  full  compliance 
with  the  "National  Electrical  Code  " 

(Attach  Fire  Protection,  Lightning  and  Dynamo  and  Standard 
Time  Clauses.) 


DIVISION  IX  i 

MISCELLANEOUS  NON-MANUFACTURING        i 


There  are  many  classes  of  property  that  are  not  custom- 
arily grouped  as  mercantile  or  as  manufacturing  risks,  for 
which  it  is  usual  to  draw  special  forms;  a  few  are  given  for 
illustration. 

The  permits  and  clauses  to  be  attached  to  such  forms  are 
those  applicable  generally,  together  with  such  as  may  seem 
desirable  or  necessary  to  meet  the  particular  needs  of  each 
separate  risk,  or  those  required  locally. 

COAL   MINING  PLANT  FORM 

{Uniformity  West) 

This  policy  being  for  $...,,  covers  its  pro  rata  proportion  of 
and  on  the  following  amounts  and  items: 

*1  $.  .  .  .On  the roof tipple  building,  including  all 

permanent  fixtures,  approaches  and  trestles  attached  thereto,  and 
construction  work  to  a  point  twenty  feet  below  the  level  of  the 
ground;  mine  cars,  cages,  shear  wheels,  steel  ropes,  scales,  screens, 
tipples,  hoppers,  and  all  other  equipment  and  appurtenances  usual 
to  a  coal  tipple,  all  only  while  contained  in  or  on  said  tipple 
building,   approaches  and  trestles. 

*2  $ ....  On  the roof fan  house  building ;  includ- 
ing foundations  and  all  permanent  fixtures  belonging  to  and 
constituting  a  part  of  said  building;  on  engines,  pumps,  fixed 
and  movable  machinery,  including  foundations,  settings,  connec- 
tions, and  attachments;  dynamos,  electrical  appliances,  apparatus 
and  devices;  and  all  furniture  and  fixtures,  tools,  implements, 
utensils  and  supplies;  all  only  while  contained  in  said  fan  house 
building. 

*3  $....0n     the roof boiler     and     engine     house 

building,  including  foundations  and  all  permanent  fixtures  be- 
longing to  and  constituting  a  part  of  said  building. 

*4  $....0n  engines,  boilers,  pumps,  fixed  and  movable  machin- 
ery, Including  foundations,  settings,  connections  and  attachments; 
dynamos,  electrical  appliances,  apparatus  and  devices;  and  all 
furniture  and  fixtures,  tools.  Implements,  utensils  and  supplies; 
all  only  while  contained  in  the  above  described  boiler  and  engine 
house. 

*5$....0n  the roof power  house  building,  in- 
cluding foundations  and  all  permanent  fixtures  belonging  to  and 
constituting  a  part  of  said  building. 

?92 


MISCELLANEOUS   NON-MANUFACTURING  293 

*6  $....0n  engines,  pumps,  fixed  and  movable  machinery,  in- 
cluding foundations,  settings,  connections  and  attachments ;  dyna- 
mos,, electrical  appliances,  apparatus  and  devices;  and  all  furniture 
and  fixtures,  tools,  implements,  utensils  and  supplies;  all  only 
while  contained  in  the  above  described  power  house. 

Note: — Items  3  and  4  to  be  used  only  in  cases  where  there  is  a 
separate  power  house  aside  from  boiler  and  engine  house. 

*7  $. . .  .On  the roof blacksmith  and  machine  shop 

building,  including  foundations,  stationary  forges  and  all  per- 
manent fixtures  belonging  to  and  constituting  a  part  of  said 
building. 

*8  $....0n  fixed  and  movable  machines  and  machinery,  in- 
cluding foundations,  settings,  connections  and  attachments;  elec- 
trical appliances,  apparatus  and  devices;  portable  forges,  bellows 
and  all  furniture  and  fixtures,  tools,  implements,  utensils  and 
supplies;  all  only  while  contained  in  the  above  described  black- 
smith  and  machine  shop. 

*9  $ On     the roof stable  .  building,     including 

foundations  and  all  permanent  fixtures  belonging  to  and  con- 
stituting a  part  of  said  building. 

*10  $..  ..On  horses  and  mules;  in  case  of  loss  this  company 
will  not  be  liable  for  more  than  (or  in  case  of  other  insurance 
for  more  than  its  pro  rata  proportion  of)  $250  on  any  one  horse 
or  any  one  mule,  nor  in  any  case  for  more  than  the  actual  cash 
value  of  the  animal  damaged  or  destroyed;  vehicles  (excluding 
automobiles  and  motorcycles),  harness,  blankets,  tools,  implements, 
hay,  grain  and  feed;  all  only  while  contained  in  the  above  de- 
scribed stable. 

*11  $....0n    the roof office    building,    including 

foundations  and  all  permanent  fixtures  belonging  to  and  constituting 
a  part  of  said  building. 

*12  $...,0n  office  furniture,  fixtures  and  supplies,  desks,  safes, 
typewriters,  stoves,  tools,  implements  and  utensils;  all  only  while 
contained  in  the  above  described  office  building. 

*13  $....0n 

$.... Total  Insurance.  Average  Premium  Per  M.  $.... 

All    of    the    above    described    property    being    situated 

, State  of  Illinois. 

*No  insurance  attaches  under  any  of  the  above  items  unless  a 
certain  amount  is  specified  and  inserted  in  blank  immediately  pre- 
ceding the  item. 

Other   insurance   permitted. 

Permission  granted  to  operate  at  night  later  than  ten  (10) 
o'clock  P.  M. 

Permission  granted  to  cease  operations  for  not  exceeding  thirty 
(30)    days   at  any  one  time. 

(Attach  Mechanic's  Permit,  Work  and  Materials,  Lightning  and 
Dynamo  and  other  usual  clauses.) 


294  THE  AGENTS   KEY   TO   FIRE   INSURANCE  i 

BITUMINOUS   COAL   FORM  | 

(Uniformity  West)  ^ 

$ On  bituminous  coal  (except  bituminous  slack  or  screenings)  ;   \ 

and  provided  the  assured  is  legally  liable  therefor,  this  item  shall  j 
also  cover  such  coal  held  in  trust  or  on  commission,  or  sold  but  ] 
not  delivered,  only  while  piled  outside  of  building,  free  and  clear  ^ 

of  any  slack  or  screenings,  located  on  premises  known  as i 

and  on  railroad  cars  within   100  feet  thereof,  situated I 

The   steel   or  other  hoisting   apparatus  on   said   premises   is   re-  j 

quired  to  be  moved  and  kept  at  least  one  hundred  (100)   feet  from  \ 

any  frame  covered   or   enclosed   structure   except   loading   pockets,  \ 

when  such  hoisting  apparatus  is  not  in  use.  ': 

Any  claim  for  loss  or  damage  to  property  insured,  by  any  one  \ 

fire  where  actual  loss  or  damage  does  not  exceed  $5,000.00  in  one  i 

fire,  is  hereby  expressly  waived  in  advance.     Only  the  excess  of  .' 

loss  or  damage  above  $5,000.00  in  any  one  fire  is  contracted  to  be  ; 
insured    hereunder. 

Permission    to    work    nights    and    to    cease    operations    for    such  j 

periods  as  in  the  nature  of  the  assured's  business  may  be  necessary.  : 

(Attach  usual  or  required  clauses.)  i 


DOCK  OR  TERMINAL  COMPANY'S  FORM 

$ On    goods,    wares    and    merchandise    of    every    description, 

belonging  to  other  parties  in  whole  or  in  part,  for  which  the  in- 
sured is  liable  by  reason  of  mistakes,  omissions,  inability  or  neglect 
on  the  part  of  the  said  insured,  while  contained  in  or  on  all  the 
buildings  owned,  occupied  or  operated  by  them,  situate  on  or  near 

also  in  and  on  the  piers,  wharves,  yards,  streets,  sheds  and 

bulkheads  adjacent  thereto. 

It  is  understood  and  agreed  that  the  liability  of  this  insurance 

company   under   this   policy   is    limited   to ($ )    for 

loss  resulting  from  any  one  fire  and  that  no  other  insurance  is  to  be  ; 
considered  contributing  unless  it  be  under  a  form  concurrent  with 
this  policy. 

Privilege  to  do  such  work  and  to  use  such  materials  as  are 
usual  in  the  business  of  warehousemen,  common  carriers,  freighters 
and  forwarders,  and  to  transport  and  handle  such  merchandise 
and  other  property  as  may  be  usual  in  the  business  of  Steamship 
Companies,  Railroads,  Common  Carriers,  Forwarders  and  Ware- 
housemen. ; 

It  is  understood  and  agreed  that  Motor  Vehicles  are  allowed 
on  the  above  described  premises. 

(Attach  other  usual  or  required  clauses.) 


MISCELLANEOUS   NON-MANUFACTURING  295 

LUMBER  FORM 

{Tonaivanda) 

$ On   lumber,   timber,   lath,   shingles,    pickets,   posts,    and    all 

other  stock  in  their  line  of  trade,  including  lumber  yard  fixtures 
and  equipment  consisting  principally  of  foundations,  roadways, 
trucks,  sleighs,  piling  strips  and  coverings,  their  own  or  held  by 
them  in  trust,  for  sale  or  on  commission,  or  sold  but  not  delivered 
or   removed   all   while  contained   on   their  yard    and   dock,   or   on 

dock  adjoining,  and  in  or  on  vessels  tied  up  at  said  dock, 

also  in  sheds  or  in  or  on  cars,  on  side  tracks,  on  wagons,  trucks, 
sleighs,  and  in  streets,  roadways,  and  on  loading  grounds  adjacent 
to  said  yard,  situate 

It  is  understood  and  agreed  that  this  policy  does  not  cover  lum- 
ber in  or  on  vessels  until  marine  insurance  thereon  ceases. 

Other  concurrent  insurance  permitted. 

Clear  Space  clause  attached. 

%  Coinsurance  Clause. 

(Add  other  usual  or  required  clauses.) 


LUMBER  FORM  (RETAIL) 

{Uniformity  West) 

$....0n  office  building,  warehouses,  stables,  sheds  and  fences; 
and  on  lumber,  lath,  shingles,  pickets,  posts,  timbers,  sash  doors, 
blinds,  mouldings,  window  glass,  nails,  mixed  and  dry  paints, 
lime,  hair,  cement,  coal,  wire,  plaster,  building  paper,  builders' 
hardware,  and  such  other  merchandise  as  is  usually  kept  for  sale 
in  retail  lumber  yards;  and,  provided  the  assured  is  legally  liable 
therefor,  this  item  shall  also  cover  such  merchandise  held  in  trust, 
or  on  commission,  or  sold  but  not  delivered;  on  tools,  implements, 
utensils,  scales,  harness,  feed  and  vehicles  (excluding  automobiles, 
motorcycles  and  gasoline  trucks),  on  horses  and  mules  (in  case  of 
loss  this  company  will  not  be  liable  for  more  than  [or  in  case 
of  other  insurance  for  more  than  its  pro  rata  proportion  of] 
$250  on  any  one  horse  or  any  one  mule,  nor  in  any  case  for  more 
than  the  actual  cash  value  of  the  animal  damaged  or  destroyed)  ; 
on  office  furniture  and  fixtures,  stationery,  office  supplies  and  safe; 
all  only  while  contained  in  assured's  buildings  and  yard,  or  in 
cars  in  assured's  yard  or  within  100  feet  thereof,  situated 

If  this  form  is  attached  to  a  fire  policy  this  company  assumes 
liability  for  loss  on  horses  and  mules  by  lightning,  while  on  or 
off  the  premises. 

(Attach  usual  and  required  clauses.) 


296  THE   AGENTS   KEY  TO   FIRE   INSURANCE  I 

LUMBER  FORM  (OTHER  THAN  RETAIL) 

{Uniformity  IV est)  \ 

$....On  lumber,  lath,  shingles,  poles,  posts,  ties,  slabs  and  other  i 
timber  products;  and,  provided  the  assured  is  legally  liable  there-  ] 
for,  this  item  shall   also  cover  such  products  held  in  trust,  or  on  5 

commission,  or  sold  but  not  delivered;  all  only  while  on i 

yard   situated ;    also    in    cars    on   the    premises    above    de-  \ 

scribed  or  within  100  feet  thereof,  | 

Other  insurance  permitted.  ~  \ 

It  is  a  condition  of  this  insurance  that  this  policy  shall  also  j 
cover  on  tramways,  if  the  property  of  the  assured ;  provided,  ; 
however,  that  the  liability  of  this  company  shall  extend  only  to  : 
such  portions  of  said  tramways  as  are  within  the  limits  of  the 
within  described  lumber  yard,  and  in  no  event  shall  this  company  \ 
be  liable  for  any  part  of  said  tramways  that  may  be  within  the  j 
clear  space  maintained  between  the  within  described  lumber  yard  \ 
and  anv  woodworking  or  manufacturing  establishment  or  dry  j 
kiln. 

Clear   Space   Clause  ' 

It  is  made  a  condition  of  this  insurance  that  a  continuous  clear  1 

space    of    not    less    than feet   shall    at   all    times    hereafter  \ 

be  maintained  between  the  property  herein  described  and  any  : 
woodworking  or  manufacturing  establishment,  or  dry  kiln;  and  j 
that  said  space  shall  not  be  used  for  the  handling  or  piling  of 
lumber  thereon  for  any  purpose  (tramways  upon  which  lumber  < 
is  not  piled  alone  being  excepted)  ;  but  this  shall  not  be  con-  , 
strued  to  prohibit  loading  or  unloading  within,  or  the  transporta-  : 
tion  of  lumber  or  timber  products  across  such  clear  space.  j 

Should  the  property  hereby  insured  be  or  become  separated  j 
fifty  (50)  feet  or  more,  by  streets,  roadways,  alleys,  water  spaces  : 
or  other  spaces  {not  commonly  used  for  piling  ground  or  tern-  * 
porarily  vacant),  then  this  policy  is  subject  to  the  conditions  of  j 
the  following  Average  Clause:  ' 

Average  Clause  j 

It   is   understood   and   agreed   that  the   amount   insured   by   this  \ 
policy  shall   attach  in  each  of  the  above  named  premises,  in  that  \ 
proportion  to  the  whole  amount  insured  that  the  value  of  property  | 
covered  by  this  policy,  contained  in  each  of  said  places,  shall  bear 
to  the  value  of  such  property  contained  in  all  of  the  above  named 
premises. 

In  some  localities  a  reduction  in  rate  is  made  where  a 
certain  percentage  of  lumber  in  yard  is  hardwood,  the  fol-' 
lowing  clause  being  attached  to  policy: 


I 


MISCELLANEOUS   NON-MANUFACTURING  297 

HARDWOOD    LUMBER   YARD   CLAUSE 

In  consideration  of  a  reduced  rate  of  premium,  it  is  made  a 
condition  of  this  insurance,  that  the  lumber  contained  in  the 
within  described  lumber  yard  is  not  less  than....%  hardwood, 
and  that  not  less  than....%  hardwood  lumber  shall  be  kept  in 
said  yard  during  the  life  of  this  policy. 

OIL  TANK  AND  CONTENTS  FORM 

{Uniformity  West) 
(Steel  or  Wood  Construction) 

*1  $ On barrel state    whether    farm,    working 

or  flow  tanks tanks  of construction,  being  not  ex- 
ceeding $....on  each  tank,  known,  numbered,  and  situated  as 
follows: 

*2  $ On  crude  petroleum  and/or  its  products,  being  not  ex- 
ceeding $..,.on  contents  of  each  tank  described  above. 

This  insurance  shall  also  cover,  provided  the  assured  is  legally 
liable  therefor,  property  described  in  this  policy,  held  in  trust, 
or  on  commission,  or  on  joint  account  with  others,  or  sold  but 
not  delivered. 

*No  insurance  attaches  under  any  of  above  items  unless  a 
certain  amount  is  specified  and  inserted  in  blank  immediately 
preceding   the   item. 

Other  insurance   permitted. 

This  company  shall  not  be  liable  for  more  than  its  pro  rata 
proportion  of  any  loss  under  this  policy,  and  the  aggregate  claim 
against  this  company,  under  all  of  its  policies,  regardless  of  where 
issued,  covering  above  described  property,  shall  not  exceed  $.... 
on  any  one  tank   and/or  its  contents. 

In  event  of  claim  for  loss  or  damage  to  crude  petroleum,  the 
basis  of  settlement  shall  be  the  posted  market  price  thereof  on 
the  date  of  the  fire,  plus  the  gathering  and  pipe  line  charges, 
plus  premium  value  actually  paid,  to  include  also,  where  crude 
petroleum  is  delivered  to  assured  in  railroad  tank  cars,  loading, 
unloading  and  freight  charges;  and  in  event  of  claini  for  loss 
or  damage  to  petroleum  products  the  basis  of  settlement  shall 
be  the  market  value  thereof,  at  the  time  and  place  of  loss. 

Daily  Record  Clause 
It  is  made  a  condition  of  this  insurance:  (1)  That  the  assured 
shall  keep  a  daily  report  showing  a  complete  record  of  all  crude 
petroleum  and/or  its  products  produced  and  shipped,  and  which 
shall  show  the  amount  of  crude  petroleum  and/or  its  products  each 
day  during  the  term  of  this  policy,  in  each  tank  described  herein ; 
(2)  That  the  assured  shall  at  all  times  keep  such  complete  record 
in  some  secure  place  not  exposed  to  a  fire  which  would  ignite  or 


298  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

destroy  any  of  the  oil  tanks  described  herein;  (3)  That  in  case 
of  loss  the  assured  shall  produce  such  complete  record. 

This  insurance  does  not  cover  cost  of  excavations  and  fillings, 
foundations,    underground    piping,    fittings,    conduits    and    drains. 

The  validity  of  this  policy  shall  not  be  affected  if  there  be  a 
lien,  mortgage  or  bonded  indebtedness  or  if  the  property  is 
situate  on  leased  ground. 

Notice  is  hereby  acknowledged  that  the  assured  has  waived  or 
may  waive  its  rights  of  recovery  from  railroad  or  transportation 
companies  for  any  damage  by  fire  occurring  to  the  property 
described  herein  or  affected  thereby. 

Wherever  in  this  policy  time  is  referred  to,  it  shall  be  con- 
strued to  mean  standard  time  where  the  property  insured  hereunder 
is  located. 

(Attach  Lightning  and  R.  R.  C.  Clauses.) 


ELECTRIC  POWER  PLANT  FORM 

(Illustration) 

This  policy  for  $ covers  pro  rata  on  each  of  the  following  ; 

items,  aggregating to  wit:  I 

1.  $ On    the concrete    building,    occupied     as    an  ■• 

electric  light  and  power  station,  including  additions   and  perma-  i 

nent    fixtures,    but    excluding    all    foundations    below    the    level  i 
of  the  basement  floors;   and  on  the  contents  thereof,  consisting  of 

steam  boilers  and  settings,  funnels,  stacks,  coal  bunkers  and  other  ! 

appurtenances,    pumps,    piping    fixtures,    tools    and    all    apparatus  ! 

pertaining  to   boilers;    steam   turbines,   motors    and   their   settings,  ! 

belting,   shafting,   pulleys,   hangers,   and   all    apparatus  pertaining  ! 

to   motive    power;    dynamos    of    all    descriptions,    regulators,    and  1 

other  devices  belonging  thereto;  all  other  electrical  and  non-electri-  i 

cal  fixtures,  apparatus  and  devices  and  all  tools,  furniture  supplies,  i 

materials,   signs,    awnings,   pictures   and   frames,    drawings,   plans  j 

and  other  property  not  hereinbefore  specified  used  in  its  business.  \ 

2.  $ On  Coal  Crusher  and  Conveyor. 

3.  $ On  Water  Tank. 

4.  $ On  Coal  Wharf  and  Coal  Runway,  and 

5.  $ On  Bulkheads,  situate ^^  P^  *^*  above  de- 
scribed property  situated  in  the  approximate  vicinity  of 

It  is  hereby  understood  and  agreed  that  this  policy  does  not 
attach  on  any  property  the  title  to  which  in  part  or  as  a  whole  is 
not  vested  in  this  Company  if  same  is  specifically  insured  in  form 
different  to  the  above,  or  on  the  said  property  until  the  specific 
insurance  thereon  is  cancelled. 

This  policy  does  not  cover  any  loss  on  coal  caused  by  spon- 
taneous combustion  of  such  coal.  ^ 

ii 


MISCELLANEOUS  NON-MANUFACTURING  299 

Permission  granted  for  the  use  of  the  above  described  premises 
for  any  purposes  incidental  to  its  business,  for  them  to  remain 
vacant  and  unoccupied;  to  let  portions  of  them  for  purposes  not 
more  hazardous;  to  make  alterations,  additions,  and  repairs;  to 
operate  all  night;  to  cease  operations  as  occasion  or  necessity 
may  require;  but  not  to  exceed  ninety  (90)  consecutive  days;  to 
keep  and  use  such  articles  and  oils  as  may  be  deemed  necessary  or 
as  may  be  incidental  to  its  business  or  that  of  its  tenants,  but  not 
to  exceed  five  gallons  of  gasoline,  benzine  or  naphtha  in  any  build- 
ing except  the  oil  house. 

The  failure  of  the  assured  to  comply  with  the  conditions  of  this 
policy  under  any  item  shall  not  prejudice  their  right  to  recover 
a  loss  under  any  other  item. 

The  validity  of  this  policy  shall  not  be  questioned  because  of 
any  mortgage  that  is  now  in  force  or  that  may  hereafter  be 
effected  upon  the  property,  that  is  not  endorsed  hereon. 

Loss,    if   any,   payable   to   the Trust    Company,   Trustee, 

Mortgagee,  as  interest  may  appear  subject  nevertheless  to  all  the 
conditions  of  the  policy. 

(Attach  O.  I.  P.  Lightning  and  Dynamo,  Co-Insurance  and  other 

clauses.) 


ELECTRIC  LIGHT  AND  POWER  PLANT  FORM 
{Uniformity  West) 

*1  $.  .  .  .On  the story roof building,  in- 
cluding foundations,  plumbing,  electric  wiring  and  stationary 
heating,  lighting  and  ventilating  apparatus  and  fixtures  therein, 
other  than  those  used  for  generating  electricity;  also  all  per- 
manent fixtures  belonging  to  and  constituting  a  part  of  said  build- 
ing; occupied  as  an  electric  light  plant  and  (or)  power  house, 
situated 

*2  $....0n  fixed  and  movable  machinery  of  every  description, 
engines,  boilers,  pumps,  dynamos,  exciters,  motors,  including  their 
settings,  connections,  attachments  and  appurtenances;  lamps, 
switches,  wire  and  other  electrical  appliances;  hose  and  other 
fire  extinguishing  appliances;  signs  and  awnings  (signs  and 
awnings  covered  under  fire  policies  only)  ;  furniture,  fixtures, 
tools,  implements,  utensils  and  supplies;  all  only  while  contained 
in,  or  attached  to,  the  above  described  building. 

*4  $....On 

*5  $....0n 

No  insurance   attaches   under  any  of  the  above   items  unless  a 
rtain  amount  is  specified  and  inserted  in  blank  immediately  pre- 
ceding the  item. 

—  (Attach  usual  clauses.) 


It* 


300 


THE  AGENTS  KEY  TO  FIRE  INSURANCE 


ELECTRIC  LIGHT  AND  POWER  STATIONS 

(Buildings  and  Machinery  and  other  Articles  subject  to  Conditions 
of  80  Per  Cent  Co-Insurance  Clause) 

{S.  E.  U.  A.) 

Electric    Light    and/or    Power    Station,    situate 

This  policy  covers  to  the  extent  of  $....,  being  pro  rata  of 
each  of  the  following  items: 

(It  is  understood  and  agreed,  however,  that  no  part  of  this 
insurance  attaches  or  applies  to  any  building  or  buildings  listed 
below,  nor  to  their  contents,  except  where  a  specific  amount  is 
placed  opposite  such  building,  and  then  applies  specifically  to 
buildings  and/or  contents  only  in  the  sum  set  opposite  each 
such  building.) 

$ On  Buildings  and  Connections,  including  Stacks,  Plumbing 

and  Piping. 

$ On  Machines  and  Machinery,  other  than  Electrical  Ap- 
purtenances and  Appliances,  Boilers,  Engines  and  Pumps,  including 
all  connections.  Implements,  Tools,  Utensils,  Fire  Extinguishing 
Apparatus,  Office  Furniture,  Furnishings  and  Fixtures,  Iron  Safes, 
Printing  and  Writing  Machines,  Stationery  Supplies,  and  all 
material  and  extra  parts,  only  while  contained  in  building  or 
buildings  specified  below. 

$ On     Dynamos,     Exciters,     Motors,     Transformers,     Lamps, 

Switches,  Wire  and  all  other  Electrical  Machinery,  Appliances, 
Appurtenances  or  Devices,  only  while  contained  in  building  or 
buildings  specified  below. 


DESCRIPTION 


Amt.     insured 
on    Buildings, 

Etc..   Per 
I     1st  Item 


Amt 

insured 

on 

Machln- 

erv 

,    Etc., 

Per 

2d    Item 

Amt.     insured  j 

on     Electrical  i 

Machinery,  \ 

Etc.,    Per  j 

3d    item  J 


On    the story building roof 

known    as building 

un    the story building roof 

known   as building 

On    the story buUding roof 

known    as building 

On    the story building roof 

known    as building 

On    


This  insurance  is  effected  subject  to  the  following  conditions, 
which  are  hereby  made  warranties  by  the  assured,  and  are  ac- 
cepted  as   parts  of  this  contract: 

Permission  granted  for  use  of  Central  Oiling  System,  or  to  keep 
not   exceeding   three    (3)    barrels   of   lubricating   oils   in   standard 


\ 


MISCELLANEOUS   NON-MANUFACTURING  301 

cabinets  inside  above  described  buildings ;  otherwise  not  exceeding 
one   day's   supply    shall    be    permitted   therein. 

(Attach  80%  Co-Insurance,  Lightning  and  Dynamo,  Fire  Pro- 
tection  and   Standard  Time   Clauses.) 

ICE  AND  ELECTRIC  LIGHT  PLANTS 

(Buildings  and  Machinery) 
{S.  E.  U.  A.) 

Name situate 

This  policy  covers  to  the  extent  of  $.... being  pro  rata  of  each 
of  the  following  items: 

(It  is  understood  and  agreed,  however,  that  no  part  of  this 
insurance  attaches  or  applies  to  any  building  or  buildings  listed 
below,  nor  to  their  contents,  except  where  a  specific  amount  is 
placed  opposite  such  building,  and  then  applies  specifically  to 
buildings  and/or  contents  only  in  the  sum  set  opposite  each  such 
building  or  contents  item.) 

(1)  $ On story building roof 

situate and    occupied    as    an    electric   light    and    ice    plant, 

designated  as  main  building. 

(2)  $ On    Machines    and    Machinery,    other    than    electrical, 

appurtenances  and  appliances,  excluding  boilers  and  engines  and 
including  pipes,  tanks,  baths,  hoisting  apparatus,  liquefiers,  am- 
monia tanks  and  their  contents,  pumps  other  than  boiler,  feed 
and/or  fire,  including  all  connections  and  millwright  work,  im- 
plements, tools,  utensils,  fire  extinguishing  apparatus,  office  furni- 
ture, furnishings  and  fixtures,  iron  safes,  printing  and  writing 
machines,  stationery  supplies  and  all  material  and  extra  parts 
and  materials  required  and  used  in  the  manufacture  of  ice  for 
generating  of  electric  light  and/or  power  not  specified  in  the 
foregoing  and  while  contained  in  main  building  described  under 
item  No.  1. 

(3)  $....0n  dynamos,  exciters,  motors,  transformers,  lamps, 
switches,  wiring  and  all  other  electrical  machinery,  appliances, 
appurtenances  or  devices  contained  in  main  building  described 
under  Item  No.  1. 

(4)   $,  . .  .On  the story building roof  known 

as building. 

(5)   $....0n    the    contents    of building    described    above 

under  item  No.   6,  consisting  chiefly  of 

(6)   $ On  the story building roof  known 

as building., 

(7)  $....On  boilers,  their  settings  and  stacks,  engines,  boiler 
feed  and/or  fire  pumps,  foundations,  and  connections,  all  while 
contained  in 

(Attach  usual  clauses.) 


302  THE  AGENTS   KEY  TO  FIRE  INSURANCE  '] 

i 

STREET  RAILWAY  GENERAL  SCHEDULE  FORM      ' 

(Illustration) 

i 

This  Policy  for  $ covers  pro  rata  on  each  of  the  following  j 

items,  aggregating  $ to  wit: 

1.  $33,970.  On  brick,  metal-roof  building,  occupied  as  an  elec-  j 
trie  light  and  power  station,  situate 

2.  $80,415.     On    electrical    machinery,    and  i 

3.  $156,940.  On  machinery  other  than  electrical,  all  while  con-  [ 
tained  i"  bnild'ng  described  under  Item  No.  1.  i 

4.  $7,350.  On  brick  and  frame,  metal-roof  buildings,  occupied  | 
principally  as  a  storage  battery  room,  and  storehouse,  situate  ; 

5.  $27,250.     On  electrical  machinery,  and  1 

6.  $30,500.  On  machinery  other  than  electrical,  all  while  con-  i 
tained  in  buildings  described  under  Item  No.  4.  i 

7.  $1,600.     On  wooden  wharf.  i 

8.  $1,095.  On  brick  and  frame,  metal-roof  building,  occupied  : 
for  storage  and  stable  purposes,  all  situate I 

9.  $2,400.  On  contents,  and  on  horses  and  mules  (in  case  of  loss  ; 
no  one  animal  to  be  valued  in  excess  of  $200,00),  vehicles  of  all  ; 
kinds,  and  parts  of  same,  harness,  robes,  blankets,  whips,  and  other  i 
horse  and  vehicle  furnishings  and  equipments,  stable  furniture.  1 
tools,  implements,  hay,  grain,  feed  and  straw,  all  while  contained  | 
in  buildings  described  under  Item  No,  8, 

10.  $47,160.     On   electrical   machinery,   and 

11.  $7,440.  On  machinery  other  than  electrical,  all  while  con-  ' 
tained  in Station  located ', 

12.  $42,765.  On  electrical  machinery,  all  while  contained  in  ! 
Sub-station  located ; 

13.  $12,420.  On  contents,  all  while  contained  in  brick,  metal-  • 
roof  building,  occupied  principally  as  an  office  and  storeroom,  | 
situate 1 

14.  $800.  On  corrugated  iron  and  concrete  building  occupied 
as  a  sub-station,  situate 

15.  $5,400.  On  electrical  machinery,  all  while  contained  in 
building  described  under  Item  No.  14. 

16.  $14,000,  On  brick  and  corrugated  iron,  metal-roof  building, 
occupied   as   a   repair  shop,   storeroom,   and  office,   situate 

17.  $7,800.  On  contents,  while  contained  in  building  described 
under  Item  No.  16. 

18.  $20,000.  On  brick  and  mill  construction  roof  buildings,  be- 
ing $10,000  on  each  section  separated  by  fire  wall,  occupied  as  car 
barn  and  shops,  situate 

19.  $2,000.  On  brick  and  corrugated  iron  and  metal-roof  build- 
ing occupied  as  barn  and  shops  situate J" 

20.  $2,000.  On  corrugated  iron  building,  occupied  as  a  paint  I 
shop,  situate ^ 

n 


MISCELLANEOUS  NON-MANUFACTURING  303 

21.  $50.  On  contents,  while  contained  in  building  described 
under  Item  No.  20. 

22.  $3,200.  On  corrugated  iron,  and  metal-roof  building,  occu- 
pied as  a  power  station,  situate 

23.  $4,000.     On  electrical  machinery,  and 

24.  $23,800.  On  machinery,  other  than  electrical,  all  while  con- 
tained in  building  described  under  Item  No.  22. 

25.  $1,750.  On  frame  metal-roof  building,  occupied  as  a  wait- 
ing station,  office,  and  dwelling,  situate 

26.  $250.  On  contents,  while  contained  in  building  described 
under  Item  No.  25. 

27.  $800.  On  corrugated  iron  building,  occupied  as  a  car  barn, 
situate 

28.  $282,935.  On  cars,  their  own,  or  held  by  them,  or  belonging 
to  others  for  which  they  may  be  liable,  while  contained  in  any  of 
the  above  described  buildings,  or  in  any  other  buildings  used  for 
the  storage  of  cars,  or  adjacent  thereto,  or  on  tracks  of  roads  owned 
or  operated  by  the  assured  or  upon  which  the  assured's  cars  may 
be  operated. 

29.  $25,000.  On  frame,  metal  and  shingle-roof  building,  occu- 
pied as  a  pavilion,  cafe,  and  theatre,  situate 

30.  $1,750.  On  contents,  while  contained  in  buildinur  described 
under  Item  No.  29. 

31.  $750.  On  water  tank,  including  foundations,  situate  in  rear 
of  building  described  under  Item  No.  29. 

32.  $250.  On  bandstand,  situate  in  rear  of  building  described 
under  Item  No.  29. 

33.  $150.     On  frame  building,  occupied  as  a  waiting  room,  and, 

34.  $50.  On  two  frame  buildings,  occupied  as  car  sheds,  being 
$25.00  on  each,  all  situate 

35.  $210.  On  frame  building,  as  a  waiting  room,  situate 

36.  $50.  On  frame  building,  occupied  as  a  waiting  room,  and 
car  shed,  situate 

37.  $700.     On  frame  shed,  occupied  as  a  pavilion,  and, 

38.  $400.  On  frame  building,  occupied  as  a  club-house  and  bar, 
both  situate 

^  39.  $400.  On  wooden  poles,  while  contained  in  the  vacant  lot, 
vituate 

^  40.  $150.  On  frame  building,  occupied  as  a  waiting  room, 
situate 

The  terms,  "Building,"  "Electrical  Machinery,"  "Machinery  other 
than  electrical,!'  "Contents,"  and  "Cars,"  and  the  specific  sums  in- 
sured thereon  in  this  policy  shall  cover  and  apply  as  follows: 

Building:  Buildings  and  additions  thereto  (excluding  founda- 
tions), stacks,  tanks,  scales,  transfer  and  turn  tables,  coal  con- 
veyors, hoisting,  heating,  lighting  and  ventilating  apparatus  (ex- 
cluding  dynamos    and    engines),    partitions,    platforms,    plumbing, 


304  THE  AGENTS   KEY  TO  FIRE  INSURANCE  ] 

i 

standpipes,  hose,  gas  fixtures  and  fittings,  wiring  and  lamps,  signs, 
awnings,  and  all  fixtures  and  fittings  attached  to  buildings. 

Electrical    Machinery:      Dynamos,    steam    turbines,    motors,    ex-  | 

citers  (excluding  foundations),  and  duplicates  and  duplicate  parts,  : 

storage   batteries,   transformers,   converters,   switches,    and   switch-  ; 

boards,  switchboard  apparatus,  cables  and  all  other  electrical  ap-  ; 

purtenances,  appliances  and  connections,  except  supplies.  i 

Machinery,  Other  Than  Electrical:    Fixed  and  movable  machines  i 

and  machinery  (excluding  foundations),  engines  and  their  appurte-  j 

nances  and  attachments,  boilers  and  settings,  pumps,  heaters,  con-  j 

densers,  meters  and  their  connections,   appurtenances   and   attach-  i 

ments,  piping,  valves,  shafting,  gearing,  belting  and  all  machines,  ; 

appurtenances,    appliances,    tools,    implements,    and    utensils,    office  ! 

furniture,  and  fittings,  stationery  and  safes,  and  all  electrical  and  i 
non-electrical    supplies,    materials,    and    property    not    otherwise 
insured  used  in  its  business. 

Contents:    Electrical  machinery  and  machinery  other  than  dec-    i 
trical  as  above  defined.  J 

Cars:    Motor  cars,  trailers  and  other  cars,   car  bodies,  trucks,    I 
motors,  fare  registers,  headlights  wiring  and  equipment  of  same,    I 
sweepers,  salters,  sprinklers,  tower  wagons,  patrol  wagons,  and  all 
vehicles  of  every  description  and  their  appurtenances  not  specifi- 
cally insured.  j 

It   is   hereby  understood    and    agreed   that  this    policy   does   not 
attach  on  any  property  the  title  to  which,  in  part  or  as  a  whole    ■ 
is  not  vested  in  this  Company,  if  same  is  specifically  insured  in    • 
form  different  to  the  above,  or  on  the  said  property  until  the  specific    : 
insurance  thereon  is  cancelled. 

Other  insurance  permitted  without  notice  until  requested.  1 

Permission  granted  for  the  use  of  the  above  described  premises 
for  any  purpose  incidental  to  its  business,  for  them  to  remain 
vacant  and  unoccupied;  to  let  them  for  purposes  not  more  hazard- 
ous; to  make  alterations,  additions  and  repairs;  to  operate  all 
night;  to  cease  operations  as  occasion  or  necessity  may  require  but 
not  to  exceed  ninety  (90)  consecutive  days;  to  keep  and  use  such 
articles  and  oils  as  may  be  deemed  necessary  or  as  may  be  inci- 
dental to  its  business  or  that  of  its  tenants,  but  not  to  exceed  five 
gallons  of  gasoline,  benzine  or  naphtha  in  any  building  except  the 
oil  house.  ^] 

Notice  acknowledged  that  the Power  Station  insured  un-  J 

der  Items  1,  2  and  3   and  the Power  Station  under  Items  - 

22,  23  and  24  are  not  operated  except  in  case  of  emergency,  which  ', 
fact  shall  not  prejudice  this  Insurance.  ' 

Notice  is  hereby  accepted  that  $19,050  of  electrical  machinery  in-  , 

sured  under  Item  No.    12  of  this  policy  is  owned  by  the. 

Company,  and  leased  to  the   Company  for  operating  pur-  ; 

poses,  and  loss,  if  any,  under  that  portion  of  this  item  is  payable  i 


MISCELLANEOUS    NON-MANUFACTURING  305 

to  the Trust  Company,  Trustee,  Mortgagee,  as  its  interest 

may  appear,  subject  to  conditions  of  this  policy. 

This  policy  shall  cover  any  direct  loss  or  damage  caused  by 
Lightning  (meaning  thereby  the  commonly  accepted  use  of  the 
term  "Lightning"  and  in  no  case  to  include  loss  or  damage  by 
cyclone,  tornado  or  windstorm),  not  exceeding  the  sum  insured 
nor  the  interest  of  the  insured  in  the  property,  and  subject  in  all 
other  respects  to  the  terms  and  conditions  of  this  policy,  provided, 
however,  that  if  there  shall  be  any  other  insurance  on  said  property, 
this  Company  shall  be  liable  only  pro  rata  with  such  other  insur- 
ance for  any  direct  loss  by  Lightning,  whether  such  other  insurance 
be  against  direct  loss  by  Lightning  or  not;  and  provided  further 
that,  if  dynamos,  wiring,  lamps,  motors,  switches,  or  other  electri- 
cal appliances,  or  devices  are  insured  by  this  policy,  this  Com- 
pany shall  not  be  liable  for  any  loss  or  damage  to  such  property 
resulting  from  any  electrical  injury  or  disturbance,  whether  from 
artificial  or  natural  causes,  unless  fire  ensues,  and  then  for  the 
loss  by  fire  only. 

It  is  a  part  of  the  consideration  of  this  policy,  and  the  basis  upon 
which  the  rate  of  premium  is  fixed,  that  the  assured  shall  main- 
tain insurance  on  the  property  described  under  Items  Nos.  1,  3,  4, 
6,  7,  8,  9,  11,  13,  14,  16,  17,  18,  19,  20,  21,  22,  24,  25,  26  and  27 
to  the  extent  of  eighty  (80)  per  cent,  of  the  actual  cash  value 
thereof;  and  on  property  described  under  Items  Nos.  2,  5,  10,  12, 
15,  23  and  28  to  the  extent  of  the  full  cash  value  thereof,  and 
on  property  described  under  Items  Nos.  29  to  40,  inclusive,  to  the 
extent  of  seventy-five  (75)  per  cent,  of  the  actual  cash  value 
thereof;  and  failing  so  to  do,  the  assured  shall  be  an  insurer  to  the 
extent  of  such  deficit,  and  in  that  event  shall  bear  a  proportion  of 
any  loss.  This  clause  shall  apply  to  each  of  the  Items  above  de- 
scribed separately. 

The  failure  of  the  Assured  to  comply  with  the  conditions  of  this 
policy  under  any  item  shall  not  prejudice  their  right  to  recover 
a  loss  under  any  other  item. 

The  validity  of  this  policy  shall  not  be  questioned  because  of  any 
mortgage  that  is  now  in  force  or  that  may  hereafter  be  effected 
upon  the  property  that  is  not  endorsed  hereon. 

Loss,    if   any,    payable   to   the Trust    Company,   Trustee, 

Mortgagee,  as  its  interest  may  appear,  subject  to  conditions  of  this 
policy. 

AUTOMOBILE    GARAGE   FORM 

(Industrial  or  Public) 

(For  Use  on  Either  Fire  or  Tornado  Policies) 

{Uniformity  West) 

*1  $ On  the story roof .building,  in- 

luding  foundations,  plumbing,  electric  wiring  and  stationary  heat- 
ig,  lighting  and  ventilating  apparatus  and  fixtures  therein;  also 


306                 THE  AGENTS   KEY  TO  FIRE  INSURANCE  j 

1 
i 

all  permanent  fixtures,  stationary  scales   and  elevators,  belonging  ! 

to  and  constituting  part  of  said  building;   occupied  as  a  garage  ' 

and  repair  shop,  situated 

*2  $ On  all  fixed  and  movable  machinery  of  every  descrip-  ; 

tion  incident  to  the  business  of  a  garage  and  repair  shop;  electrical  j 

apparatus,  appliances  and  devices;  hose  and  other  fire  extinguish-  j 

ing  appliances;  machinists'  supplies  and  tools;  garage  and  repair  | 

shop  furniture  and  fixtures;  signs  and  awnings  (signs  and  awnings  j 

covered  under  fire  policies  only)  ;  office  furniture,  fixtures,  printed  ! 

books  and  supplies;   pictures,  paintings  and  engravings,  including  • 

their  frames,    all    at  not   exceeding  cost;    counters,   shelving,   iron  i 

safe,  typewriters   and  cash  registers;   all  only  while  contained  in,  i 

or  attached  to,  the  above  described  building.  ; 

*3  $....0n • 

*4  $....0n ; 

*No  insurance  attaches  under  any  of  the  above  items  unless  a  ! 

certain    amount    is    specified    and    inserted    in    blank    immediately  ■ 

preceding  the  item.  i 

Subject   to    the    following   conditions,    permission   is   granted   to  j 

manufacture,    repair,    store    and   sell    automobiles   in   the   building  ! 

described  in  this  policy.  1 

The  conditions  of  this  permit,  in  so  far  as  they  are  within  control  j 

of  the  assured,  are  as  follows:  i 

1 — That  no  claim  shall  be  made  for  loss  or  damage  to  an  auto-  i 

mobile,    any  of   its   parts   or    equipment,    unless    such    automobile,  j 

its  parts  or  equipment,  is  specifically  mentioned  as  insured  under  i 

this  policy.  j 

2 — That   the    gasoline    supply   tank   shall    be   at   least   five    (5)  ; 

feet  from  such  building,  unless  it  is  buried  in  the  ground  at  least  j 

two  (2)   feet  below  the  level  of  the  basement  floor.     All  pipes  for  | 

filling  or  ventilating  the  supply  tank  shall  be  outside  the  building,  j 
and  piping  shall  be  so  laid  as  to  drain  toward  the  tank. 

3 — That  no   cleaning   of   an   automobile,   or    any   parts   thereof,  j 
shall  be  done  by  any  gasoline  spraying  device;   that  there  shall 

be  no  gasoline  kept  within  any  building  described  in  this  policy,  i 

except  that  contained  in  the  reservoirs  of  automobiles  and  measur-  ; 

ing  pumps   used  for   filling;    provided,   however,   that  there   may  | 

be  not  exceeding  one  barrel   in   a  portable  tank  equipped  with  a  | 

measuring  pump,  and  also  not  exceeding  one  gallon  for  cleaning  | 

purposes;  that  the  handling  of  gasoline  or  the  opening,  filling  or  . 

emptying  of  any  gasoline   reservoir   of   an    automobile   while  the  \ 
same  is  contained  in  the  within  described  building  shall  be  done 

by  daylight  or  incandescent  electric  light  only.  i 

4 — ^That  when   acetylene  gas   is   used   for   automobile   lamps,   it  | 

shall  be  contained  in  an  airtight  metal  tank  or  generator,  and  not  j 

over  one  hundred   (100)   pounds  of  calcium  carbide  shall  be  kept  ' 


MISCELLANEOUS    NON-MANUFACTURING  307 

in  the  within  described  building,  the  same  to  be  contained  in 
watertight  metal  receptacles. 

5 — The  term  "gasoline"  shall  be  held  to  include  naphtha,  benzine 
or  any  of  the  light  products  of  petroleum,  coal  or  tar,  by  whatever 
name  known. 

Note: — The  granting  of  the  above  permits  does  not  waive  any 
schedule  charge  therefor. 

(Attach  usual  clauses.) 

BUILDING    OCCUPIED    AS    PUBLIC    AUTOMOBILE 
REPOSITORIES  AND   GARAGES 

{S.  E.  U.  A.) 

$ ....  On  the story building,  with roof,  in- 
cluding foundations,  partitions,  and  all  permanent  fixtures  attached 
thereto,  while  occupied  as  an  automobile  repository  or  garage, 
situated  No on  the side  of Street,  in 

$ On  their  fixed  and  movable  machinery,  including  shafting, 

belting,  hangers,  connections,  tools,  and  all  appurtenances  and 
appliances  necessary  to  the  proper  conduct  of  a  public  Automobile 
Garage  and  Repair  Shop,  only  while  contained  in  the  above 
described  building. 

$....On 

This  insurance  is  effected  subject  to  the  following  conditions, 
which  are  hereby  made  warranties  by  the  assured,  and  are  accepted 
as  part  of  this  contract: 

Total  insurance  permitted  warranted  concurrent  herewith,  in- 
cluding this  policy,  as  follows: 

$ on  Building;   $ on   Machinery;   $ on 

It  is  understood  and  agreed  that  no  insurance  in  addition  is 
permitted  to  this  policy  unless  the  total  insurance,  including  this 
policy,  is  entered  in  paragraph  above. 

It  is  warranted  by  the  assured  that  no  smoking  or  artificial 
light  other  than  incandescent  electric,  or  heat  other  than  steam, 
hot  water  or  hot  air,  shall  be  permitted  in  the  same  room  or 
rooms  adjoining  and  communicating  with  that  in  which  the 
machines  are  kept,  and  no  repairs  requiring  the  use  of  artificial 
heat  or  open  flame  shall  be  made  in  the  building. 

It  is  further  warranted  by  the  assured  that  the  cleaning  of  any 
automobile  or  its  parts  with  gasoline  or  other  volatile  oils  shall  not 
be  allowed  in  any  building  or  buildings  in  which  this  policy 
covers;  that  the  automobile  reservoirs  for  storage  of  gasoline  or 
other  volatile  oils  shall  be  filled  by  daylight  or  incandescent 
electric  light  only,  and  that  at  no  time  shall  there  be  stored  any 
gasoline  or  other  volatile  oil   in  any  such  building  where   above 


308  THE  AGENTS   KEY  TO  FIRE   INSURANCE  ; 

named  machines  are  housed  exceeding  one  gallon  in  the  chamber! 
of  a  measuring  or  similar  pump,  except  that  contained  in  thd 
machine  reservoirs,  and  that  when  more  than  ten  gallons  ofl 
gasoline  is  kept  outside  of  any  such  building  it  shall  be  under; 
ground  or  thirty  feet  removed  from  insured  property.  However,, 
the  supply  tank  may  be  buried  not  less  than  two  feet  underneath^ 
the  basement  floor,  with  all  pipes  for  filling  or  ventilating  carried; 
outside  the  building.  The  term  gasoline  shall  be  held  to  includei 
naphtha,  benzine  or  any  of  the  light  products  of  petroleum  byj 
whatever  name  known. 
(Attach  usual  clauses.) 

PUBLIC  GARAGE  AND  REPAIR  SHOP  FORM    ' 

$ On  the story roof building,  includ- 
ing foundations,  plumbing,  electric  wiring  and  stationary  heating; 
and  lighting  apparatus  and  fixtures;  also  all  permanent  fixtures,] 
stationary  scales  and  elevators,  belonging  to  and  constituting  parti 
of  said  building;  occupied  as  a  public  garage  and  repair  shop, 
situated 

$ On  all  fixed  and  movable  machinery  of  every  description^ 

incident  to  the  business  of  a  garage  and  repair  shop,  including 
electrical  apparatus,  appliances  and  devices;  hose  and  other  fire 
extinguishing  appliances;  machinists'  supplies  and  tools,  and  facq 
tory  furniture  and  fixtures;  also  on  office  furniture  and  fixtures  an<J 
supplies,  counters  and  shelving,  including  iron  safe,  typewriter^ 
and  cash  registers,  all  only  while  contained  in  the  above  describee^ 
building.  i 

(Attach  usual  clauses.) 

THEATRE  FORM  j 

{Uniformity  West)  ' 

(Including  Moving   Picture   Theatres) 

*1  $ On    the story roof, building,    in-i 

eluding  foundations,  plumbing,  and  stationary  heating,  hoisting,! 
lighting  and  ventilating  apparatus  and  fixtures  therein ;  standpipes,! 
outsi'de  stairs  and  ladders;  canopies,  plate  and  stained  glass;  mir-l 
rors,  wall  and  ceiling  frescoing  and  decorations;  boilers,  engines,; 
and  electrical  apparatus  with  all  their  connections  and  appurte-: 
nances;  fixed  seatings,  fire  curtains,  galleries,  chandeliers,  ga^ 
fixtures,  and  all  permanent  fixtures  (excluding  organ  with  operating 
motor)  belonging  to  and  constituting  a  part  of  said  building;^ 
occupied  in  whole  or  in  part  as  a  theatre,  situated ' 

This  insurance  shall  also  cover  under  this  item,  if  the  property^ 
of  owner  of  building,  door  and  window  screens  and  storm  doorsfc 
and  windows,  belonging  to  above  described  building,  while  at-j 
tached  thereto  or  stored  therein.  * 

*2  $ On    furniture    and    fixtures    (excluding    moving    picture; 

machines    and    attachments),    useful     and    ornamental,    includia 


lb 


MISCELLANEOUS    NON-MANUFACTURING  309    ' 

I 
wings,  flats,  flies,  scenes,  set  pieces,  canvas,  upholstery,  drop  1 
curtains;  mirrors,  pictures,  paintings,  engravings,  including  their  ! 
frames,  statuary  and  sculpture,  all  at  not  exceeding  cost;  pianos  \ 
and  other  musical  instruments  (excluding  organ  with  operating  j 
motor);  carpenters'  and  mechanics'  work;  hose,  fire  extinguishers  1 
and  fire  apparatus;  implements  and  tools;  signs  and  awnings  J 
(signs  and  awnings  covered  under  fire  policies  only)  ;  dressing  ; 
room  furniture  and  fixtures;  booths;  phonographs,  graphophones,  j 
records,  printed  books,  music  and  music  rolls;  floor  coverings  and  ; 
all  other  furniture  and  fixtures;  all  not  belonging  to  and  con-  • 
stituting  a  permanent  part  of  the  building  and  only  while  contained  i 
in,  or  attached  to,  the  above  described  building.  j 

*3  $....0n  organ  with  operating  motor,  only  while  contained  in  j 
the  above  described  building.  ■ 

*4  $....0n  assured's  interest  in  improvements   to  the  building,  ' 

consisting    chiefly    of ,    all    only    while    contained    in,    or  j 

attached   to,   the   above   described  building.  ; 

*5  $ On    moving    picture    machines    and    attachments,    only  I 

while   contained   in   the   above   described   building.  j 

*6  $....0n ! 

*No  insurance  attaches  under  any  of  the  above  items  unless  a  t 
certain  amount  is  specified  and  inserted  in  blank  immediately ; 
preceding  the  item.  > 

This  policy  does  not  cover  on  moving  picture  films  (unless  1 
specified  herein),  whether  in  or  out  of  booth.  j 

This   policy   does   not  cover   any   loss   or   damage   to  the   booth,  j 

moving   picture    machines    therein    and/or    other   contents   therein,  i 

caused  by  fire  originating  within  the  booth  itself.  \ 

(Attach   O.    I.    P.,   Mechanics,    Work    and    Materials,   Lightning  j 

and  Electrical  Clauses.)  . 

MOVING  PICTURE  THEATRE  BUILDING  AND  ! 
FURNITURE  AND  FIXTURES  FORM 

Moving  Picture  Theatre,  located  at j 

This  policy  covers  $ being  pro  rata  of  total  insurance. 

$ On  the story roof  building  and  its  additions] 

adjoining  and  communicating,  occupied  as j 

$ On  Moving  Picture  Theatre  Furniture  and  Fixtures,  in- 
cluding picture  machines  and  appurtenances  thereto  (except  films),! 
all  while  contained  in  the  above  described  building.  . 

In  no  event  shall  this  policy  be  construed  to  cover  on  films,  nor  I 
will  this  Company  be  liable  for  any  loss  or  damage  that  may  occur; 
to  the  contents  of  the  picture  machine  booth  from  fire  originating! 
therein  and  will  be  liable  only  for  such  loss  or  damage  as  mayj 
occur  to  contents  of  said  booth  other  than  films  as  may  result  from! 
fire  originating  at  some  point  outside  of  the  booth  itself.  j 

Permission   is   hereby   given   to   use   electricity   on   the    premises] 


310  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

herein  described  for  light  or  power  provided  the  entire  installa- 
tion, including  lamps,  motors  and  rheostats,  conforms  to  the  re- 
quirements of  the  National  Electrical  Code   (Dynamo  Clause.) 

TOBACCO  PACK  BARNS  AND  TOBACCO  IN  PACK 
BARNS  {S.  E.  U.  A.) 

$ On  the story,  frame, roof  building,  used  by 

as  a  tobacco  pack  barn  for  the  storage  and  handling  of 

cured   leaf  tobacco  only;    situate   on farm   on   the 

side    of    the Road miles    from ,    in 

County,   

$ On  cured  leaf  tobacco  only,  while  contained  in  the  above 

described  pack  barn. 

In  Event  of  Any  Claim  Under  This  Policy: 

1.  The  crop  yield  shall  be  computed  at  not  exceeding 

pounds  per  acre  under  tobacco  cultivation  on  farm  described  above 
during  the  year  in  which  this  policy  is  issued,  and  in  case  of  other 
insurance,  whether  valid  or  invalid,  the  liability  of  this  company, 

if  any,  shall   be   based  pro   rata  on   not  exceeding pounds 

per  acre.  The  acreage  under  tobacco  cultivation  shall  be  de- 
termined— in  case  it  shall  be  necessary — by  a  competent  and  disin- 
terested surveyor  mutually  agreed  upon  by  the  assured  and  this 
company,  and  the  return  of  said  acreage  shall  be  under  affidavit 
of  the  surveyor  so  agreed  upon.  One-half  the  expenses  of  any 
survey  shall  be  borne  by  each  party  to  this  contract. 

2.  The  assured  shall  submit  a  complete  record  of  all  tobacco 
removed  from  the  building  above  described  during  the  tobacco 
season  in  which  this  policy  is  issued. 

3.  The  cash  value  of  the  leaf  tobacco,  covered  by  this  policy, 
shall  be  computed  at  not  more  than  the  average  price  obtained  on 
sales  of  leaf  tobacco  in  public  sales  warehouses  nearest  to  the 
agency  issuing  this  policy,  said  sales  to  embrace  a  period  of  one 
week  prior  to  date  of  fire,  as  per  authentic  official  records  of 
such  warehouses;  said  average  price  to  be  found  by  dividing  the 
total  quantity  sold  during  the  period  specified  into  the  total  price 
obtained  during  said  period. 

In  Consideration  of  the  Reduced  Rate  at  Which  This  Policy  is 
Issued,  it  is  Warranted  by  the  Assured: 

(a)  That  no  curing  of  tobacco  by  artificial  heat  will  be  done  in 
the  building  above  described  or  in  any  other  building  within  100 
feet  thereof. 

(b)  Brick-on-Edge,  Tile,  Cement  or  Metal  Flue  Warranty — 
That  the  building  and  additions  thereto  described  in  this  policy 
contains  no  brick-on-edge,  tile,  cement  or  metal  flue,  and,  further, 
that  no  such  flue  shall  be  erected  during  the  term  of  this  policy. 

(c)  That  only  closed  lanterns  shall  be  used  for  lights. 
(Attach  Noon,    %    Value,   and  Lightning  clauses,   and   limit  of 

Additional  Insurance.) 


DIVISION  X 
FIRE  POLICIES  ON  VESSEL  PROPERTY 

A  very  considerable  amount  of  fire  insurance  as  dis- 
tinguished from  marine  insurance  is  carried  on  floating 
craft  of  various  kinds  in  inland  waters.  Fire  insurance  on 
vessels  is  an  offshoot  of  marine  insurance,  and  so  in  some 
of  its  conditions  and  methods  of  handling  it  varies  from 
fire  insurance  on  buildings  and  their  contents. 

Marine  insurance  on  vessels  is  based  on  an  agreed  valua- 
tion for  the  reason  that  the  hulls  of  vessels  and  their  cargoes 
have  not  a  stable  value  as  is  the  case  of  buildings  and  their 
contents,  nor  have  they  the  same  value  in  all  markets.  For 
that  reason  a  value  is  fixed  in  advance  and  stipulated  in  the 
policy,  and  the  settlement  of  all  losses  is  based  on  the  agreed 
valuation. 

There  is  also  the  feature  of  general  average  involved  in 
the  insurance  of  vessels  which  does  not  come  into  play  in 
fire  insurance  on  shore.  The  principle  of  general  average  is 
of  great  antiquity  and,  expressed  simply,  means  that  what 
is  given  for  the  good  of  all  shall  be  made  good  by  the  con- 
tribution of  all,  e.  g.,  if  a  vessel  is  in  danger  and  part  of 
her  cargo  thrown  overboard  to  lighten  her,  or  if  she  is  on 
fire  and  part  of  the  cargo  and  hull  is  damaged  by  water  in 
extinguishing  the  flames  the  voluntary  damage  and  sacrifices 
to  save  the  rest  of  the  venture  are  made  good  by  a  contribu- 
tion from  all  the  interests  benefited  thereby,  which  usually 
are  hull,  cargo  and  the  freight  money  at  risk.  Salvage 
charges  are  dealt  with  in  the  same  way,  being  apportioned 
over  the  interests  benefited. 

Fire  insurance  on  vessels,  being  a  development  of  marine 
insurance,  follows  marine  practice  as  regards  these  two 
features,  viz.,  agreed  valuation  and  general  average  and 
salvage  charges,  and  they  are  expressed  by  special  clauses 
in  the  fire  policy  on  floating  craft. 

This  class  of  insurance  is  written  under  special  forms  at- 
tached to  the  regular  fire  policy;  and  containing  various 
clauses  as  follows: 

The  Lightning  Clause  and  the  Dynamo  Clause  are  usually 
attached,  the  following  forms  being  in  common  use: 

311 


312  THE  AGENTS  KEY  TO  FIRE  INSURANCE 

LIGHTNING  CLAUSE 

This  policy  shall  cover  any  direct  loss  or  damage  caused 
by  lightning  (meaning  thereby  the  commonly  accepted  use 
of  the  term  lightning,  and  in  no  case  to  include  loss  or  dam- 
age by  cyclone,  tornado,  or  wind-storm),  not  exceeding  the 
sum  insured  nor  the  interest  of  the  insured  in  the  property, 
and  subject  in  all  other  respects  to  the  terms  and  conditions 
of  this  policy.  Provided,  however,  that  if  there  shall  be  any 
other  insurance  on  said  property,  this  company  shall  be  liable 
only  pro  rata  with  such  other  insurance  for  any  direct  loss 
by  lightning,  whether  such  other  insurance  be  against  direct 
loss  by  lightning  or  not. 

DYNAMO  CLAUSE 

This  insurance  shall  not  cover  any  loss  or  damage  to 
dynamos,  exciters,  lamps,  motors,  switches,  or  any  other  ap- 
paratus for  generating,  utilizing,  testing,  regulating,  or  dis- 
tributing electricity,  caused  by  electric  current,  whether  arti- 
ficial or  natural. 

The    Vessel    Fire    Registry    maintains    inspectors    at    the 
principal  ports  on  the  Great  Lakes  for  the  purpose  of  in- 
specting all  vessels  applying  for  registration 
Vessel  Fire      to     see     that     the     rules     and     requirements 
Registry  necessary  to  make  them  eligible  are  complied 

with  and  observed. 

THE  VESSEL  FIRE  REGISTER  WARRANTY 

This  is  required  on  policies  covering  cargo  carriers  on  the 
Great  Lakes,  except  steel  hulls,  and  reads  as  follows: 

**In  consideration  of  the  premium  for  which  this  policy 
is  issued,  it  is  expressly  warranted  by  the  assured  that  the 
rules  and  requirements  of  The  Vessel  Fire  Register  are  and 
shall  be  complied  with  and  observed,  and  that  its  certificate 
has  been  obtained,  and  it  is  understood  and  agreed  between 
the  assured  and  this  Company  that  the  violation  of  said  war- 
ranty shall  render  this  entire  policy  void. ' ' 

GENERAL  AVERAGE  AND  SALVAGE  CLAUSE 

*'It  is  understood  and  agreed  that  this  policy  also  covers 
salvage  claims  and  general  average  charges  when  caused  by 
or  arising  from  fire  and  for  which  the  vessel  insured  here- 
under shall  be  legally  liable;  but  in  no  case  shall  the  aggre- 
gate amount  to  be  paid  under  this  policy  for  loss  and/or 
damage  and/or  expenses  of  every  nature  exceed  the  amount 
insured  hereunder.'^ 


VESSEL    PROPERTY  313 

The  Electricity  Clause  is  used  where  required,  the  form 
differing  in  the  various  parts  of  the  country. 

Some  form  of  Coinsurance  or  Percentage  Value  Clause  is 
usually  attached  unless  the  Valuation  Clause  is  used. 

In  Northern  Waters  pleasure  boats  are  required  to  bear 
the  following  clause : 

**  Warranted  laid  up  and  out  of  commission  between 

November  15th  and  March  15th.'' 

The  following  forms  illustrate  those  in  use  for  insuring 
the  various  classes  of  vessel  property: 

FIRE  POLICY  ON  VESSELS 

(Used   for   insuring  Lighters,   Barges,    Car   Ferries,   Pile   Drivers, 
Tow  Boats;  also  on  Tug  Boats.) 

Loss,  if  any,  payable  to On  the covering  the  hull, 

engines,  boilers,  machinery,  tackle,  apparel,  boats,  furniture,  fix- 
tures, appurtenances,  equipments,  stores,  and  supplies  while  on 
board. 

This    policy    to    cover    said    vessel    only    while    on and 

waters  tributary  thereto. 

If  at  the  time  of  fire  the  whole  amount  of  insurance  on  the  prop- 
erty covered  by  this  policy  shall  be  less  than  eighty  (80)  per  cent, 
of  the  actual  cash  value  thereof,  this  company  shall,  in  case  of 
loss  or  damage,  be  liable  for  only  such  portion  of  such  loss  or 
damage  as  the  amount  insured  by  this  policy  shall  bear  to  the 
said  eighty  (80)  per  cent,  of  the  actual  cash  value  of  such  property. 

If  the  policy  be  divided  into  two  or  more  items,  these  conditions 
shall  apply  to  each  item  separately. 

Privilege  to  fit  out,  to  do  painting,  to  go  on  dry  dock,  to  make 
ordinary  alterations  and  repairs,  and  to  lay  up,  to  use  oil  or  elec- 
tricity for  lights,  and  to  carry  such  passengers,  freight  and 
merchandise  as  it  is  permitted  by  law. 

Warranted  by  the  assured  that  the  vessel  shall  be  equipped  and 
navigated  according  to  Law,  that  no  open  lights  shall  be  used 
on  board  except  customary  torches  in  engine  and  boiler  rooms, 
signal  lights  and  candles  when  trimming  cargo,  that  coal  only  shall 
be  used  as  fuel,  except  when  kindling  fires,  without  special  per- 
mission from  this  company,  and  that  when  the  vessel  is  laid  up  it 
shall  be  moored  free   from  specially  hazardous  exposure. 

(Attach  Lightning  and  Dynamo  Clauses.) 

The  foregoing  form  is  made  a  valued  one  by  substituting  the 
following  clause  for  the  Coinsurance  Clause: 

It  is  understood  and  agreed  between  the  assured  and  this  Com- 
pany  that  the   value   of  the   property   insured   hereunder   for   the 


314  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

purposes  of  this  insurance  is  $, and  this  Company  shall  not 

be  liable  for  a  greater  proportion  of  any  agreed  amount  of  loss  or 
damage  than  the  amount  of  this  policy  bears  to  the  above  ex- 
pressed valuation.  Warranted  by  the  assured  that  the  total  amount 
of  insurance  against  fire  on  this  property  insured  hereunder  shall 

not   exceed  $ and   permission   is   herewith   given   to   carry 

that  amount,  including  this  policy. 


FIRE  POLICY  ON  DREDGES.  CONTRACTOR'S 
PLANT.  ETC. 

Loss,  if  any,  payable  to On  the covering  the  hull, 

engines,  boilers,  machinery,  tools,  tackle,  apparel,  boats,  furniture, 
fixtures,  appurtenances,  equipments,  stores,  and  supplies,  while  on 
board. 

This  policy  to  cover  said  vessel  only  while  on and  waters 

tributary  thereto. 

If  at  the  time  of  fire  the  whole  amount  of  insurance  on  the  prop- 
erty covered  by  this  policy  shall  be  less  than  eighty  (80)  per  cent, 
of  the  actual  cash  value  thereof,  this  company  shall,  in  case  of  loss 
or  damage,  be  liable  for  only  such  portion  of  such  loss  or  damage 
as  the  amount  insured  by  this  policy  shall  bear  to  the  said  eighty 
(80)  per  cent,  of  the  actual  cash  value  of  such  property. 

If  the  policy  be  divided  into  two  or  more  items,  these  conditions 
shall  apply  to  each  item  separately. 

Privilege  to  do  all  work  customary  for  vessels  of  its  kind  and 
trade,  to  fit  out,  to  do  painting,  to  go  on  dry  dock,  to  make  ordinary 
alterations  and  repairs,  to  lay  up,  to  use  kerosene  and  electricity  for 
lights,  and  lubricating  oils  for  machinery. 

Warranted  by  the  assured  that  no  open  lights  shall  be  used  on 
board  except  customary  torches  in  engine  and  boiler  rooms;  that 
coal  only  shall  be  used  as  fuel,  except  when  kindling  fires,  without 
special  permission  from  this  company;  and  that  when  vessel  is  laid 
up  it  shall  be  moored  free  from  specially  hazardous  exposure. 

(Attach  Lightning  and  Dynamo  Clause.) 

The  foregoing  form  is  made  a  valued  one  by  substituting  the  fol- 
lowing clause  for  the  Coinsurance  Clause: 

It  is  understood  and  agreed  between  the  assured  and  this  com- 
pany that  the  value  of  the  property  insured  hereunder  for  the  pur- 
poses of  this  insurance  is  $ and  this  company  shall  not  be  liable 

for  a  greater  proportion  of  anv  agreed  amount  of  loss  or  damage 
than  the  amount  of  this  policy  bears  to  the  above  expressed  valua- 
tion. Warranted  by  the  assured  that  the  total  amount  of  insurance 
against  fire  on  this  property  insured  hereunder  shall  not  exceed 
$ and  permission  is  herewith  given  to  carry  that  amount,  includ- 
ing this  policy.  < 


VESSEL   PROPERTY  315 

FIRE  POLICY  ON  VESSELS 
(Used  for  insuring  Cargo  Carriers  on  Great  Lakes) 

Loss,  if  any,  payable  to On  the covering  the  hull, 

engines,  boilers,  machinery,  tackle,  apparel,  boats,  furniture,  fixtures, 
appurtenances,  equipments,  stores,  and  supplies,  while  on  board. 

This  policy  to  cover  said  vessel  only  while  on and  waters 

tributary  thereto,  against  all  direct  loss  or  damage  by  fire.  This 
company  shall  not  be  liable  for  a  greater  proportion  of  any  agreed 
or  proven  amount  of  loss  or  damage  with  proper  deduction  for  de- 
preciation, however  caused,  than  the  amount  of  this  policy  bears  to 

$ Warranted  by  the  assured  that  the  total  amount  of  insurance 

against  fire  on  the  property  insured  hereunder  shall  not  exceed 
$ and  permission  is  herewith  given  to  carry  that  amount,  includ- 
ing this  policy. 

In  event  of  loss  or  damage  to  the  subject  of  insurance  by  collision, 
stranding,  leakage,  or  other  peril  or  causes  not  covered  by  this 
policy,  followed  by  or  with  which  fire  is  concurrent,  then  in  settle- 
ment of  said  loss  by  fire,  whether  the  claim  be  for  partial  or  total 
loss,  this  company  shall  be  liable  only  for  the  like  proportion  after 
deducting  the  amount  of  damage  so  caused  by  the  previous  or  con- 
current cause,  and  further  provided  that  in  no  event  shall  this  com- 
pany be  responsible  for  any  part  of  the  expense  of  taking  said  vessel 
to  a  port  or  place  of  repair  unless  the  necessity  therefor  arises 
solely  from  fire,  and  then  only  when  the  cost  of  such  removal  has 
been  approved  by  the  representative  of  this  company. 

And  it  is  further  agreed,  in  event  of  total  loss,  that  on  payment 
the  insured  will,  on  request,  transfer  to  this  company,  or  as  it  may 
direct,  the  said  vessel  and  all  appertaining  thereto,  so  far  as  covered 
by  this  policy,  in  the  proportion  which  the  sum  paid  hereunder  bears 
to  the  total  amount  paid. 

Privilege  to  fit  out,  to  do  painting,  to  go  on  dry  dock,  to  make 
ordinary  alterations  and  repairs,  and  to  lay  up,  to  use  oil  or  elec- 
tricity for  lights,  and  to  carry  such  passengers,  freight,  and  mer- 
chandise as  it  is  permitted  by  law. 

Warranted  by  the  assured  that  the  vessel  shall  be  equipped, 
manned,  and  navigated  according  to  law ;  that  no  open  lights  shall 
be  used  on  board  except  customary  torches  in  engine  and  boiler 
rooms,  signal  lights,  and  candles  when  trimming  cargo;  that  coal 
only  shall  be  used  as  fuel,  except  when  kindling  fires,  without 
special  permission  from  this  company;  and  that  when  the  vessel 
is  laid  up  it  shall  be  moored  free  from  specially  hazardous  ex- 
posure. 

General  Average  and  Salvage  Clause. — It  is  understood  and 
agreed   that  this   policy   also   covers   salvage   claims   and   general 

\  average  charges  when  caused  by  or  arising  from  fire  and  for  which 
the  vessel  insured  hereunder  shall  be  legally  liable,  in  proportion 
as  the  amount  insured  hereunder  bears  to  the  valuation  expressed 

'  herein. 


316  THE  AGENTS   KEY  TO  FIRE  INSURANCE  | 

J 

Total  Limit  of  Liability  Clause. — In  no  case  shall  the  aggre-i 
gate  amount  to  be  paid  under  this  policy  for  fire  and  water  or 
other  loss,  damage,  and/or  expenses  caused  by  or  arising  from  fire„ 
general  average,  salvage,  and/or  removal  to  port  of  repair,  and  all! 
other  claims  and  expenses,  exceed  the  amount  insured  under  thisj 
policy.  I 

Chicago  Standard  Time  Clause. — Wherever  in  this  policy  any' 
mention  is  made  of  any  hour  of  the  day  or  night,  the  same  shallj 
refer  to  Chicago    (or  Central)    Standard  Time.  ; 

(Attach  Lightning  and  Dynamo  Clauses.)  ; 

GASOLINE    FORM  | 

(Used  for  insuring  Commercial  Boats — Gasoline  for  Power)     j 

Loss,  if  any,  payable  to On  the  gasoline  boat cov-^ 

ering  the  hull,  motors,  machinery,  tackle,  apparel,  boats,  furniturej 
fixtures,  appurtenances,  equipment,  stores,  and  supplies  while  odl 
board.  ■ 

Warranted  by  the  assured  that  this  vessel  be  confined  to ^ 

Privilege  to  haul  out  and  to  go  out  of  commission;  to  go  on  drjr 
dock  and  ways;  to  make  ordinary  alterations  and  repairs;  to  use 
kerosene,  alcohol,  and  electricity. 

Permission  to  have  on  board  guns  and  ammunition  for  saluting 
and  sporting  purposes. 

Permission  is  hereby  granted  to  use  gasoline  or  naphtha  foi^ 
generating  power  only,  and  to  carry  same  in  proper  tanks;  irt 
consideration  for  which  the  assured  agree  to  use  due  diligence  m 
maintaining  free  from  leak  at  all  times,  the  tanks,  piping,  valves; 
carburetor,  and  all  other  parts  of  the  installation,  and  when  the 
boat  is  laid  up  and  out  of  commission,  to  remove  all  gasoline  oij 
naphtha  from  the  boat.  '■ 

Privilege  to  do  all  work  incidental  to  its  trade.  \ 

Warranted  by  the  assured  that  the  vessel  be  equipped  and  navi* 
gated   according  to   law. 

(Attach  Lightning  and  Dynamo  Clauses.) 

GASOLINE  YACHT  FORM 

(Used   for   insuring  Pleasure   Boats — Gasoline   Power) 

On  the covering  the  hull,  motors,  machinery,  bal-l 

last,  spars,  sails,  rigging,  blocks,  boats,  charts,  furniture,  fittings,S 
fixtures,  bedding,  cushions,  linen,  silver  and  plated  ware,  crockery,! 
glassware,  cooking  utensils,  provisions  and  supplies  of  every  de-! 
scription,  flags,  nautical  instruments,  and  all  appurtenances,  whilri 
on  board. 

Warranted  by  the  assured  that  this  yacht  be  confined  to 

Privilege  to  haul  out  and  to  go  out  of  commission;  to  go  on  dry] 


VESSEL    PROPERTY  317 

dock  and  ways;  to  make  ordinary  alterations  and  repairs;  to  use 
kerosene,  alcohol,  and  electricity. 

Permission  to  have  on  board  guns  ar.d  ammunition  for  saluting 
and  sporting  purposes. 

Permission  is  hereby  granted  to  use  gasoline  or  naphtha  for  gen- 
erating power  only,  and  to  carry  same  in  proper  tanks;  in  con- 
sideration for  which  the  assured  agree  to  use  due  diligence  in 
maintaining  free  from  leak  at  all  times,  the  tanks,  piping,  valves, 
carburetor,  and  all  other  parts  of  the  installation,  and  when  the 
boat  is  laid  up  and  out  of  commission,  to  remove  all  gasoline  or 
naphtha  from  the  boat. 

Warranted  to  be  used  solely  for  private  pleasure  purposes,  not 
to  be  hired  or  chartered  unless  approved  and  permission  endorsed 
hereon. 

It  is  understood  and  agreed  that  not  exceeding  ten  per  cent. 
(10%)  of  this  insurance  shall  apply  on  movables  belonging  to  this 
vessel  while  stored  ashore,  and  when  so  applying  the  same  amount 
shall  cease  to  cover  on  board. 

(Attach  Lightning  and  Dynamo  Clauses.) 

Note: — In  Northern  waters  the  following  clause  required:  "War- 
ranted laid  up  and  out  of  commission  between  Nov.  15th  and 
March  15th." 


YACHT  FORM 

{No  Poiver) 
(Used  for  insuring  Sail  Boats,  either  Pleasure  or  Commercial) 

Loss,  if  any,  payable  to On  the covering  the  hull, 

ballast,  spars,  sails,  rigging,  blocks,  boats,  charts,  furniture,  fittings, 
fixtures,  bedding,  cushions,  linen,  silver  and  plated  ware,  crockery, 
glassware,  cooking  utensils,  provisions,  and  supplies  of  every  de- 
scription, flags,  nautical  instruments,  and  all  appurtenances,  while 
on  board. 

This  policy  to  cover  only  while  on and  waters  tributary 

thereto. 

Privilege  to  lay  up  either  afloat  or  ashore,  to  haul  out,  to  go 
on  dry  dock,  to  make  ordinary  alteratiops  and  repairs,  to  use 
kerosene,  for  lights,  and  to  carry  gunpowder  (not  exceeding  ten 
pounds)  in  tin  cans  for  sporting  and  saluting. 

If  at  the  time  of  fire  the  whole  amount  of  insurance  on  the  prop- 
erty covered  by  this  policy  shall  be  less  than  eighty  (80)  per  cent, 
of  the  actual  cash  value  thereof,  this  company  shall,  in  case  of  loss 
or  damage,  be  liable  for  only  such  portion  of  such  loss  or  damage 
as  the  amount  insured  by  this  policy  shall  bear  to  the  said  eighty 
(80)    per  cent,  of  the  actual  cash  value  of  such  property. 

If  the  policy  be  divided  into  two  or  more  items,  these  conditions 
shall  apply  to  each  item  separately. 


318  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

It  is  further  understood  and  agreed  that  $ or per  cent,  of 

this  insurance  shall  apply  on  movables  belonging  to  this  vessel 
while  stored  ashore  at  the  place  where  said  vessel  is  laid  up,  and 
when  so  applying  shall  cease  to  cover  on  board. 

(Attach  Lightning  and  Dynamo  Clauses.) 


LAUNCH  OR  YACHT  FORM 

(Private) 
{Uniformity  fVest) 

*1  $ On  the roof boat  house,  situated. 

State  of 


*2  $ On  the power named (to  be  used 

exclusively  as  a  private  pleasure  boat),  her  hull,  and  upper  works; 
boilers,  engines,  motors,  machinery;  ballast,  spars,  sails,  rigging, 
blocks,  flags;  furniture,  fittings,  fixtures;  bedding,  cushions,  linen; 
silver  and  plated  ware,  crockery,  glassware;  cooking  utensils,  pro- 
visions and  supplies;  wearing  apparel,  watches  and  jewelry  in 
use;  charts  and  nautical  instruments,  and  all  other  appurtenances; 
all  while  on  board  said  vessel,  while  contained  in  the  above  de- 
scribed boat  house  or  while  navigating  the  waters  of all 

inclusive,  also  all  inland  waters  tributary  to  above  named  waters 
and  while  laying  up  or  stopping  at  any  place  within  the  abov£ 
described  limits.  Any  deviation  beyond  the  limits  named  herein 
shall  render  this  policy  void  only  during  the  time  the  vessel  is 
outside  the  said  limits,  and  upon  the  safe  return  of  the  vessel 
within  said  limits  this  policy  shall  re-attach  in  full  force  and  effect. 

*No  insurance  attaches  under  any  of  the  above  items  unless  a 
certain  amount  is  specified  and  inserted  in  blank  immediately  pre- 
ceding the  item. 

Privilege  to  lay  up  either  afloat  or  ashore;  to  haul  out;  to  go 

into  dry  dock  and  on  ways;   to  use  kerosene  or  coal  stove. 

The  use  of  naphtha,  gasoline  or  benzine  on  board  said  vessel 
for  any  purpose  other  than  propulsion  is  prohibited  under  this 
policy. 

There  shall  be  no  naphtha,  gasoline  or  benzine  on  board  said 
vessel,  either  when  laid  up  and  out  of  Commission  or  when  stored 
in  the  above  described  boat  house. 

(Attach  Permit  to  keep  gasoline  in  boat  house,  and  Lightning 
Clause.) 


VESSEL   PROPERTY  319 

CARGO   FORM 

Loss  if   any,   payable    to on   cargo   of owned,   or 

held  in  trust  by  the  assured,  or  on  commission,  or  in  joint  account 
with  others,  or  sold  but  not  removed,  for  which  the  assured  may 
be   liable,   while   contained   on   board   the 

This  policy  covers  only  while  vessel  is  on 

Coinsurance   Clause 
If   at  the   time   of  fire   the   whole    amount   of   insurance   on   the 

property  covered  by  this  policy  shall  be  less  than per  cent. 

of  the  actual  cash  value  thereof,  this  company  shall,  in  case  of 
loss  or  damage,  be  liable  for  only  such  portion  of  such  loss  or 
damage  as  the  amount  insured  by  this  policy  shall  bear  to  the 
said per  cent,  of  the  actual  cash  value  of  such  property. 

If  the  policy  be  divided  into  two  or  more  items,  these  conditions 
shall  apply  to  each  item  separately. 

(Attach  Lightning  and  Dynamo  Clauses.) 


DIVISION  XI  ^ 

MARINE  INSURANCE  5 

Marine  insurance  is  said  to  have  originated  with  the  Greeks  | 

and  has   accumulated  a  wealth   of  customs,  traditions  and  | 

terminology  that  is  bewildering  to  those  not  familiar  there-  1 

with.  i 

There  is  perhaps  no  branch  of  the  insurance  business  in 
which  it  is  so  necessary  to  have  technical  knowledge,  training 
and   experience.     This  is   especially   true   be- 

Experience      cause  there  are  few  standards  agreed  upon  and  j 

Necessary        observed  by  all  marine  underwriters  and  be-  ' 

cause    most    rates    are    not    fixed    either    by  I 

schedule  or  by  agreement.     In  other  words,  marine  insur-  ] 

ance  is  a  free  market  and  each  line  placed  is  largely  a  matter  ; 

of  individual  negotiation.     An   attempt   to   cover   even   the  j 

barest  outline  in  a  short  statement  would  be  futile,  but  it  j 

may  prove  helpful  to  give  a  few  features  to  be  cared  for  in  j 

placing  such  business.  | 

There   are   three   general   classes   of   marine   insurance —  j 
namely,  cargo,  hulls  and  freights.     There  are  two  forms  of    J 

cargo  insurance  commonly  used  in  this  country    I 
Export  known   as   *' export '^   policies   and   *' import"    i 

Policies  policies.    In  placing  export  policies  care  should  1 

be  exercised  that  the  ownership  is  properly  j 
described,  that  the  policy  states  to  whom  loss  is  payable,  what 
interest  is  insured,  whether  goods  are  shipped  under  or 
on  deck,  if  insured  with  average  or  subject  to  fpa  English 
conditions  and  whether  risk  of  breakage,  leakage,  or  of 
theft  and  pilferage  are  to  be  covered;  also  loss  or  damage 
by  sweat,  steam  of  hold  or  fresh  water  damage  ahd/or  by 
coming  in  contact  with  other  cargo;  also  whether  from 
original  point  of  shipment  through  to  the  final  point  of 
destination  or  from  and  to  some  intermediate  points.  If 
there  are  any  transhipments  by  rail,  water  or  coastwise 
steamers,  this  should  be  plainly  indicated.  The  valuation 
should  be  expressed  at  the  selling  price,  plus  a  given  per- 
centage, for  profits,  or  increased  value,  are  intended  to  be 
covered  in  cargo  insurance  policies.  If  freight  is  prepaid 
the  same  should  be  noted  in  the  valuation,  or  if  shipment  is  : 
made  under  a  bill  of  lading  freight  guaranteed,  vessel  lost  or  i 
not  lost,  this  should  also  be  indicated.     The  policy  should  l 

320  j 


MARINE    INSURANCE  321 

so  state  if  it  covers  freight  payable  at  destination  and  custom 
duties  assessible  on  the  goods,  for  in  adjusting  a  partial  loss 
tlie  insured  would  be  uninsured  for  the  portion  of  the  loss 
falling  on  these  interests  if  they  were  not  specifically  covered. 

If  there  is  an  additional  risk  while  goods  are  being  held 
at  destination  in  the  Custom  House,  this  should  be  protected 
as  under  the  warehouse  to  warehouse  clause  this  feature 
would  not  be  covered.  Where  open  policies  are  written  the 
largest  expected  amount  on  any  one  shipment  on  any  one 
steamer  should  be  stated  for  that  is  the  limit  for  which  the 
company  is  liable  in  any  one  disaster. 

On   import   policies    the    same   features    should   be   cared 
for  as  on  export  shipments,  except  that  on  shipments  arriving 
from  foreign  countries  the  invoices  are  usually 
Import  made  out  in  foreign  currencies  and  it  is  best  to 

Policies  have  a  fixed  value  given  to  the  pound,  franc, 

mark  or  other  currency  in  which  the  value  is 
stated. 

Open  policies  are  issued  to  importers  for  the  purpose  of 
giving  them  general  insurance  protection  for  goods  which 
may  be  shipped  to  them,  or  for  which  they 
Open  may   be    liable,    although    they   have    had    no 

Policies  previous  advices;   also  for  goods  shipped  by 

steamer,  name  of  which  is  unknown.  The  in- 
sured is,  however,  under  obligation  to  notify  the  company 
whenever  he  knows  of  shipments  that  are  to  be  made  or  the 
method  of  shipment,  and  in  the  case  of  goods  shipped 
under  letter  of  credit  to  give  the  name  and  number  thereof. 
In  covering  freight  interests  it  is  customary  to  use  the 
expression  ''valued  at  the  amount  of  charter 
Freight  party  or  at  amount  of  freight  list"  and  policy 

Interests  should  otherwise  give  the  nature  of  the  cargo 

and  whether  shipped  on  or  under  deck. 
There   are   various   forms  of  policies   for   insuring  hulls, 
the  ones  most  commonly  used  in  this  country  being  known 
as  the  American  Hull  Form  for  steel  steamers 
HnU  navigating  ocean  waters;  the  Boston  Schooner 

Policies  Form  for  sailing  vessels  and  the  Yacht  Form 

for  pleasure  craft.  The  principal  caution  ex- 
ercised in  writing  this  class  of  business  is  to  see  that  the 
ownership  is  properly  expressed,  any  mortgage  interest  noted, 
valuation  definitely  stated  and  the  waters  in  which  vessel 
expects  to  navigate  duly  described. 


DIVISION  XII 

COTTON  AND  COTTON  SEED 

Cotton,  the  great  staple  of  the  Southern  States,  is  insured 
as  such  in  various  stages  from  the  time  it  is  picked  until 
it  reaches  the  machines  to  be  made  into  cloth  or  other 
articles.  When  first  picked  it  is  weighed  in  at  the  field 
cotton  houses  or  sheds  and  then  taken  to  the  gin  house, 
being  known  as  seed  cotton  up  to  the  time  it  is  ginned,  since 
it  contains  the  seed. 

The  forms  given  hereafter  are  to  illustrate  the  wording 
of  the  various  covers  on  cotton,  gins  and  cotton  seed  oil 
mills  and  are  arranged  about  in  the  order  in  which  cotton 
is  handled  and  insured.  The  various  forms  contain  ref- 
erences to  certain  clauses  in  use  and  these  are  printed  sepa- 
rately to  avoid  repetition.  Each  form  shows  which  clauses 
are  customarily  attached. 

The  first  insurance  placed  is  to  cover  the  cotton  during 
the  interval  between  the  time  it  is  picked  and  the  time  it  is 
put  in  the  gin  house,  this  being  customary  on  the  larger 
plantations. 

There  are  other  forms  prescribed  in  certain  States,  .but 
those  given  are  typical  of  the  ones  in  common  use. 

Loss  Payable  (S.  E.  U.  A.) — The  property  covered  by  this 
policy  may  be  pledged  without  notice  as  collateral  security 
for  loans  or  advances,  but  loss,  if  any,  under  this  policy 
shall  be  adjusted  with  the  assured,  and  is  payable  only  to 
the  assured,  or  their  order,  endorsed  on  or  attached  to  this 
policy,"  subject,  however,  to  all  the  conditions  of  this  policy. 

Loss  Payable  Clause  (Louisiana) — It  is  agreed  that  any 
loss  or  damage  ascertained  to  be  due  to  the  assured  under 
this  policy  shall  be  payable  to  assured 's  order,  but  this 
insurance  shall  be  void  if  such  order  be  made  (without 
written  consent  of  this  company)  for  other  than  collateral 
purposes. 

Cotton  Co-Insurance  Clause  (S.  E.  U.  A.) — It  is  a  part 
of  the  consideration  of  this  policy,  and  the  basis  upon 
which  the  rate  of  premium  is  fixed,  that  the  assured  shall 

322 


COTTON  AND  COTTON  SEED  323 

at  all  times  maintain  insurance  on  each  item  of  property- 
insured  by  this  policy  of  not  less  than  the  actual  cash  value 
thereof,  and  that,  failing  so  to  do,  the  assured  shall  be  an 
insurer  to  the  extent  of  such  deficit,  and  in  that  event  shall 
bear  his,  her  or  their  proportion  of  any  loss. 

Cotton  Co-Insurance  Clause  (Louisiana) — *^It  is  under- 
stood and  agreed  that  the  assured  shall  at  all  times  maintain 
insurance  on  the  property  insured  by  this  policy,  and  on 
each  item  of  the  same,  equal  to  the  actual  cash  value  thereof 
and  that  failing  so  to  do,  the  assured  shall  be  an  insurer 
to  the  extent  of  such  deficit  and  in  that  event  shall  bear 
his,  her  or  their  proportion  of  any  loss  on  such  property; 
and  this  Company  shall  be  liable  for  not  exceeding  such 
proportion  of  loss  or  damage  as  the  amount  insured  by  this 
policy  shall  bear  to  the  actual  cash  value  of  such  property 
at  the  time  of  the  fire,  in  all  localities  covered  by  this  policy. 

**It  is  further  understood  and  agreed  that  if  this  policy 
covers  at  more  than  one  place  or  location  (and  within  the 
meaning  of  this  clause  each  warehouse,  yard  or  platform 
is  understood  to  be  a  separate  location),  then  the  whole 
amount  of  insurance  named  herein  shall  be  distributed  and 
apply  in  each  location  as  the  value  of  the  property  insured 
in  each  location  bears  to  the  total  value  of  the  property 
insured  in  all  localities. '' 

Reduced  Rate  Contribution  Clause  (Oklahoma) — In  con- 
sideration of  the  rate  at  (and)  or  form  under  which  this 
Policy  is  written,  it  is  expressly  stipulated  and  made  a 
condition  of  this  contract,  that  this  Company  shall  be  held 
liable  for  no  greater  proportion  of  any  loss  than  the  amount 
hereby  insured  bears  to  the  actual  cash  value  of  the  property 
described  herein  at  the  time  when  such  loss  shall  happen; 
but  if  the  total  insurance  upon  such  property  exceeds  the 
actual  cash  value  at  the  time  of  such  loss,  then  this  com- 
pany shall  only  be  liable  for  the  proportion  which  the  sum 
hereby  insured  bears  to  such  total  insurance. 

If  this  Policy  be  divided  into  two  or  more  items  the  fore- 
going conditions  shall  apply  to  each  item  separately. 

Co-Insurance  Clause  (Arkansas) — It  is  understood  and 
agreed  that  the  assured  shall  at  all  times  maintain  insurance 
on  the  property  insured  by  this  policy  equal  to  the  actual 
cash  value  thereof  and  that  failing  so  to  do,  the  assured 
shall  be  an  insurer  to  the  extent  of  such  deficit  and  in  that 


324:  THE  AGENTS  KEY  TO  FIRE  INSURANCE 

event  shall  bear  his,  her  or  their  proportion  of  any  loss  on 
such  property;  and  this  Company  shall  be  liable  for  not 
exceeding  such  proportion  of  the  loss  or  damage  as  the 
amount  insured  by  this  policy  shall  bear  to  the  actual  cash 
value  of  such  property  at  the  time  of  fire,  in  all  localities 
covered  by  this  policy. 

It  is  further  understood  and  agreed  that  if  this  policy 
covers  at  more  than  one  place  or  location  (and  within  the 
meaning  of  this  clause  each  warehouse,  yard  or  platform  is 
understood  to  be  a  separate  location),  then  the  whole  amount 
of  insurance  named  herein  shall  be  distributed  and  apply  in 
each  location  as  the  value  of  the  property  insured  in  each 
location  bears  to  the  total  value  of  the  property  insured  in 
all  locations. 

Co-Insurance  Contract  (Tennessee) — In  consideration  of 
the  rate  at  ^nd  (or)  form  under  which  this  policy  is  written, 
it  is  expressly  stipulated  and  made  a  condition  of  this  con- 
tract, that  the  assured  shall  at  all  times  maintain  insurance 
on  each  item  of  property  insured  by  this  policy  to  the  extent 
of  at  least  one  hundred  per  cent  (100%)  of  the  actual  cash 
value  thereof,  and  that  failing  to  do  so,  the  insured  shall  be  a 
co-insurer  to  the  extent  of  such  deficit,  and  in  that  event 
shall  bear  his,  her  or  their  proportion  of  any  loss. 

One  Hundred  Feet  Clear  Space  Clause  (S.  E.  U.  A.) — 

Warranted  by  assured  that  a  clear  space  of  not  less  than 
100  feet  will  at  all  times  be  maintained  between  cotton  in- 
sured hereunder  and  any  Gin  House  or  other  special  hazard. 

A  bale  of  cotton  often  has  several  changes  of  ownership 
without  change  of  location.  Law  and  custom  differ  as  to 
what  constitutes  delivery  in  such  cases,  hence  the  use  of 
Ownership  Clauses. 

Ownership  Clause  (Oklahoma) — It  is  a  condition  of  this 
insurance,  that  only  actual  payment  by  cash,  check  or  other- 
wise, together  with  the  passing  of  a  written  delivery  order, 
and  a  transfer  to  purchaser  named  on  books  to  be  kept  for 
that  purpose  by  the  management  of  the  gin,  compress,  ware- 
house or  yard  where  said  cotton  is  stored,  shall  constitute 
delivery  of  cotton  purchased  from  seller  to  buyer;  and  that 
tickets,  checks  or  receipts  for  cotton  deliverable  to  bearer 
shall  not  be  considered  full  evidence  of  ownership,  but  must 
be  verified  by  written  delivery  order  and  transfer  on  books 
as  hereinbefore  provided. 


COTTON   AND    COTTON    SEED  325 

Ownership  Clause  (Arkansas) — It  is  understood  and  agreed 
to  be  a  condition  of  this  insurance,  that  only  actual  payment 
by  cash,  check  or  otherwise,  together  with  the  passing  of  a 
written  delivery  order  and  a  transfer  to  purchaser  named 
on  books  to  be  kept  for  that  purpose  by  the  management 
of  the  compress,  warehouse  or  yard  where  said  cotton  is 
stored,  shall  constitute  delivery  of  cotton  purchased  from 
seller  to  buyer;  and  it  is  further  agreed  that  tickets,  checks 
or  receipts  for  cotton  deliverable  to  bearer  shall  not  be 
considered  full  evidence  of  ownership,  but  must  be  verified 
by  written  delivery  ordered  and  transfer  on  books  as  herein- 
before provided. 

Ownership  Clause  (Tennessee) — It  is  made  a  condition  of 
this  insurance  that  only  actual  payment  by  check  or  otherwise 
shall  constitute  delivery  of  cotton  from  the  seller  to  the 
buyer. 

Record  Warranty  (Louisiana) — It  is  warranted  that  the 
assured  will  keep  books  showing  a  complete  and  correct 
record  of  all  cotton  under  the  protection  of  this  policy, 
which  record  shall  show  weight,  location  stored,  receipts 
and  shipments,  and  in  case  of  baled  cotton  the  mark  or 
number  of  each  bale;  and  in  case  of  loss  or  damage  the 
assured  will  produce  such  record  for  the  examination  of 
this  company,  otherwise  this  entire  policy  shall  be  null  and 
void. 

Daily  Record  Clause  (Oklahoma) — The  assured  under  this 
policy  hereby  covenants  and  agrees  to  keep  a  set  of  books 
showing  a  complete  daily  record  of  all  cotton  and  cotton 
seed  handled;  together  with  a  complete  daily  record  of  all 
cotton  put  into  the  gin  or  cotton  house,  and  all  cotton  taken 
from  the  gin  or  cotton  house;  and  all  cotton  seed  put  into 
the  gin  or  seed  house,  and  all  cotton  seed  taken  from  the 
gin  or  seed  house;  also  a  record  showing  baled  cotton  stored 
on  premises  described  herein,  such  record  to  include  date 
at  which  each  bale  of  cotton  covered  under  this  policy  was 
purchased  or  received  and  from  whom  purchased  or  re- 
ceived, together  with  original  tag  number  or  mark  thereon 
with  its  weight  and  classification;  also  complete  daily  record 
of  shipments  or  sales  of  baled  cotton,  showing  to  whom 
shipped  or  sold  with  the  date  of  shipment  or  sale,  together 
with  original  tag  number,  or  mark,  weight  and  classification 
of  each  bale;  and  in  ease  of  loss  the  assured  agrees  and 
covenants  to  produce  such  books  and  records;   and  in  the 


326  THE  AGENTS   KEY  TO  FIRE  INSURANCE 


event  of  failure  to  comply  with  any  of  the  conditions  of  •; 
this  clause,  this  policy  shall  be  null  and  void.  \ 

Record  Clause  (Arkansas)— The  assured  under  this  policy  | 
hereby  covenants  and  agrees  to  keep  a  set  of  books,  showing  \ 
a  complete  daily  record  of  all  cotton  handled,  which  record  } 
shall  include  the  date  at  which  each  bale  of  cotton  covered  \ 
under  this  policy  was  purchased  or  received,  from  whom 
purchased  or  received,  in  what  compress,  warehouse  or  yard  | 
stored,  together  with  the  original  tag  number  or  mark  ] 
thereon,  with  its  weight  and  classification,  and  a  complete  ] 
daily  record  of  all  shipments  or  sales,  showing  to  whom 
shipped  or  sold,  with  date  of  shipment,  from  what  warehouse,  ' 
compress  or  yard  so  shipped,  and  the  original  tag  number  i 
or  marks,  weight  and  classification  of  each  bale  and  such  \ 
complete  record  shall  also  show  all  removals  from  one  ' 
location  covered  hereby  to  any  other  location,  whether  cov-  : 
ered  hereby  or  not,  and  in  case  of  loss  the  assured  agrees  ; 
and  covenants  to  produce  such  books  and  records  and  in  the  j 
event  of  failure  to  produce  the  same  this  entire  policy  shall  1 
be  null  and  void.  ,  j 

Cotton — Right  of  Replacement  Notice  (Louisiana)— Notice  I 

is  hereby  given  that  in  the  event  of  loss  under  this  policy,  j 
the  company  has  the  right  as  provided  under  the  printed  j 
conditions  of  this  policy  to  replace  with  cotton  of  like  kind  i 
and  quality  the  cotton  that  may  be  damaged  or  destroyed  1 
by  fire.  j 

Replacement  clause  (Arkansas) — It  is  understood  and  j 
agreed  that  the  basis  for  adjustment  of  any  claim  for  loss  1 
or  damage  to  the  property  covered  by  this  policy  shall  not  < 
exceed  the  actual  cash  value  of  such  property  at  the  time  > 
of  the  loss  and  at  the  place  of  fire,  which  cash  value  shall  I 
in  no  event  be  greater  than  it  would  then  and  there  cost  to  | 
replace  the  property  damaged  or  destroyed  with  property  \ 
of  the  same  kind  and  quality.  j 

Standard  Time  Clause  (S.  E.  U.  A.) — It  is  understood  and  \ 

agreed  that  the  word  **noon"  as  used  herein,  in  designating  * 

the  beginning  and  ending  of  the  term  of  insurance,  refers  ; 

to  Standard  Time  at  the  place  where  the  property  is  located.  | 

Cotton  (Prohibition  of  Smoking)  (S.  E.  U.  A.)— Warranted  j 

by  the  assured  that  no  smoking  will  be  allowed  in  the  ware-  I 

house,  compress,  platform  or  yard  described  in  the  within  j 

policy.  j 


COTTON  AND  COTTON  SEED  327 

Cotton  storage  "Warranty  (S.  E.  U.  A.) — The  following  is 
hereby  agreed  and  understood  to  be  a  condition  of  this 
insurance  and  a  warranty  on  part  of  the  assured,  viz.:  For 
and   in   consideration   of   a   reduction   in   rate   of  premium 

given  by  reason  hereof,  not  more  than bales  will  be 

stored  in  any  one  compartment  of  the  within  described  build- 
ing at  any  one  time,  and  the  cotton  will  not  be  stored  or 

piled  over bales and  in  case  cotton  is  piled, 

there  will  be  maintained  a  clear  space  of inches  be- 
tween top  of  cotton  and  automatic  sprinklers  at  all  times; 
and  no  cotton  will  be  left  on  platforms,  in  yards  or  in 
courts  adjoining  the  above  described  warehouse  between 
the  hours  of  8  p.  m.  and  6  a.  m. 

Sample  and  "Weight  Clause  (S.  E.  U.  A.) — (Warranty  to 
sample  and  weigh  each  bale  of  cotton,  and  to  produce  such 
sample  and  record  of  weight  in  case  of  loss) — the  following 
covenant  and  warranty  is  hereby  made  a  part  of  this  policy : 

1.  The  assured  will  take  sample  of,  and  record  the  weight 
of,  each  bale  of  cotton  insured  under  this  policy,  and  unless 
such  sample  has  been  taken,  and  weight  recorded,  this  policy 
shall  not  be  in  effect,  but  shall  be  null  and  void  until  such 
sample  has  been  taken  and  weight  recorded. 

2.  The  assured  will  keep  such  samples  and  record  of 
weights  in  some  place  not  exposed  to  a  fire  which  would 
destroy  the  cotton  insured. 

In  the  event  of  failure  to  produce  such  samples  and  record 
of  weights  for  the  inspection  of  this  Company,  this  policy 
shall  become  null  and  void,  and  such  failure  shall  constitute  a 
perpetual  bar  to  any  recovery  thereon. 

COTTON  GIN  FORM   (OKLAHOMA) 

{Stock   Only) 

$ On  cotton  ginned  and  unginned,  baled  and  unbaled,  seed 

cotton,  cotton  seed,  including  sacks  or  packages  containing  same, 
and  bagging  and  ties;  their  own,  or  held  by  them  in  trust,  or  on 
commission,  or  sold  but  not  delivered,  or  being  ginned,  or  handled 
for  assured's  own  account,  or  for  the  account  of  others  and  for 
which  the  assured  may  be  liable  in  case  of  loss;  all  only  while 
contained  in  cotton  houses  or  sheds,  seed  houses  or  sheds,  and 
while  passing  through  the  cotton  gin,  and  while  in  wagons  on 
premises,  or  in  gin  yard  on  premises;  and,  provided  bill  of 
lading  has  not  been  signed  for  same,  this  policy  shall  also  cover 
such  property  in  and  on  cars  within  two  hundred  feet  of  gin 
premises. 


328  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

All   of  the  above  described  property  being  located  on  premises 

known    as gin situated Town    of 

County  of State   of  Oklahoma. 

Other   concurrent   insurance    permitted. 

Permission  to  make  alterations  and  repairs  for  not  exceeding 
thirty  (30)  days  at  any  one  time,  which  shall  include  the  fifteen 
(15)   days  granted  in  printed  conditions  of  Policy. 

Permission  to  use  electricity  for  light,  heat  and  power  in  the 
within  described  premises. 

Caution: — See  that  the  entire  electrical  equipment  is  installed 
and  maintained  in  full  compliance  with  the  standard  requirements 
of  the  National  Electrical  Code,  copy  of  which  may  be  obtained 
of  your  insurance   agent. 

No  smoking  shall  be  permitted  on  the  within  described  premises. 

In  the  event  of  cancellation  by  the  assured  not  less  than  two 
months'  premium  shall  be  retained  by  the  company,  at  gin  house 
card  rates. 

Any  loss  under  this  Policy  that  may  be  proved  due  the  assured 
shall  be  payable  to  the  assured  and 

(Attach  Ownership,  Daily  Record,  Lightning  and  R.  R.  Con- 
tribution Clause.) 


FOR  "ORDINARY"  GINS  ONLY 

{S.  E.  U,  A.)  ■ 

1.  $ on story    frame roof    building,    occupied  ' 

as  a  Gin  House,  run  by power,  situate  on planta- 
tion in  County  of State  of about 1 

2.  $....on Saw  Gin-stands  therein,  not  exceeding  $....  j 

on  each. 

3.  $....on Condensers    therein,    not    exceeding    $....on  \ 

each.  j 

4.  $....on Feeders  therein,  not  exceeding  $....on  each.  ^ 

5.  $ on Gin   Gearing,  Belting  and   Shafting  therein.  ; 

6.  $ on Cotton  Ginned  and  Unginned  therein.  i 

7.  $ on Cotton  Seed  therein.  ■ 

8.  $ on Engine  and  Boiler,  located ^ 

9.  $....on Water-wheel.  i| 

10.  $ on Grist  Mill  therein.  ^ 

11.  $....on Cotton  Press,  located S 


No   additional   Insurance   permitted   unless   the   amounts   are   in- 
serted by  Agent  of  this  Company  in  the  blank  spaces  noted  below, 

viz.:  $ on  item  No.  1;  $ on  item  No.  2;  $ on  item  No.  3; 

$ on   item   No.  4;    $ on   item   No.   5;   $ on   item   No.   6; 


COTTON  AND  COTTON  SEED  329 

$ on   item   No.   7;    $ on    item    No.    8;    $ on   item   No.    9; 

$ on  item  No.   10;   $ on  item  No.   11. 

Three-Fourths  Value  Clause. — It  is  understood  and  agreed 
to  be  a  condition  of  this  insurance  that,  in  the  event  of  loss  or 
damage  by  fire  to  the  property  insured  under  this  policy,  this 
company  shall  not  be  liable  for  an  amount  greater  than  three- 
fourths  of  the  actual  cash  value  of  each  item  of  property  insured 
by  this  policy  (not  exceeding  the  amount  insured  on  each  such  item) 
at  the  time  immediately  preceding  such  loss  or  damage;  and  in  the 
event  of  additional  insurance — if  any  is  permitted  hereon — then  this 
company  shall  be  liable  for  its  proportion  only  of  three-fourths 
of  such  cash  value  of  each  item  insured  at  the  time  of  the  fire  not 
exceeding  the  amount  insured  on  each  such  item. 

Assured  also  warrants  each  of  the  succeeding  clauses  in  this 
form  and  the  statements  and  undertakings  therein,  and  agrees  that 
the  breach  of  any  one  or  more  of  said  statements  or  undertakings 
shall  render  this  policy  null   and  void. 

Each  item  or  subject  of  insurance  under  this  policy  (other  than 
the  building  or  buildings)  is,  for  the  purpose  of  this  contract  of 
insurance,  to  be  treated  and  considered  to  mean  personal  property. 

Ownership  and  Title. — That  the  assured  is  the  sole  and  vjn- 
disputed  owner,  absolutely  and  in  fee  simple,  of  the  land  on  which 
these  buildings  stand,  and  it  is  not  mortgaged  or  leased. 

Running  of  the  Gin. — That  the  property  hereby  insured  will 
be  in  active  operation  'during  the  ginning  season,  and  that  it  is 
not  idle  property. 

Condensers. — That  condensers  will  be  used  when  gin  is  in 
operation. 

Smoking  Prohibited. — That  he  does  not,  and  will  not,  permit 
smoking  in  and  about  the  Gin  House. 

Night  Work  Prohibited. — ^That  the  use  of  artificial  light  without 
special  permit  endorsed  on  this  policy,  or  the  operating  or  repair- 
ing of  machinery  at  night,  is  absolutely  prohibited. 

LxGHTS. — When  permission  for  night  work  is  granted,  that  the 
use  of  lights  other  than  closed  lanterns,  filled  by  daylight  only  and 
outside  the  building,  is  prohibited. 

Boiler. — That  the  boiler  and  smokestack  of  same  is  sound  and 
securely  braced  and  rises  above  the  highest  point  of  the  roof. 

Water  to  be  Kept. — That  an  iron-bound  barrel  and  two  buckets, 
each  always  filled  with  water,  shall  be  continuously  kept  within 
ten  feet  of  each  Gin  Stand  and  Press,  and  in  the  same  room  there- 
with, to  be  used  in  case  of  fire. 

Cotton  Record. — That  the  assured  will  keep  a  book  containing 
a  faithful  record  of  all  cotton  put  into  and  taken  from  the  gin  or 
cotton  house,  and  that  such  record  will  be  produced  in  case  of  loss. 

Incendiarism. — That  so  far  as  assured  knows  or  believes,  there 
are  no  threats,  nor  any  danger  of  incendiarism,  and  that  he  has 
no  reason  to  suspect  any,   and  that  no  such  serious  disagreement 


330  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

has  arisen  with  employees  or  tenants  of  the  old  force  or  the  present 
as  to  produce  threats  or  apprehensions  of  incendiary  danger. 

Cancellation. — That  in  the  event  of  cancellation  by  the  assured, 
not  less  than  six  months'  premiums  on  gin  house  and  machinery 
shall  be  retained  by  the  Company,  and  not  less  than  two  months' 
premium  on  cotton  or  seed,  at  gin  house  card  rates. 

Mixed  Hazards.— That  there  is  no  Flour  Mill,  Saw  Mill,  Plan- 
ing Mill,  Cotton  Seed  Oil  Mill,  or  any  manufacturing  risk,  except 
Grist  Mill,  connected  with  the  Gin  House,  or  within  100  feet 
thereof. 

Special  reference  being  had  to  assured's  application,  which  is 
made  a  warranty  and  part  thereof. 

COTTON  GINS  (System) 

(Warranted  to  Have  an  Improved  System  Gin) 
(S.  E.  U.  A.) 

1.  $ On story  building,  built  of with 

roof,  while  occupied  only  as  a  gin  house. 

2.  $ On  cotton  ginning  machinery  of  all  kinds  in  use  (ex- 
cepting engine,  boiler  and  fittings  and  round  bale  press),  consisting 
of  gin  stands,  feeders,  condensers,  dust  and  lint  flues,  square  bale 
presses  and  appurtenances,  suction  elevator,  fan,  vacuum  boxes, 
distributors,  piping,  pulleys,  seed  blowers,  seed  feeders,  conveyors, 
shafting,  belting,  hangers,  journals,  tools,-  scales  and  hose;  all 
only  while  contained  in  above  described  gin  house  building. 

3.  $ On  grist  mill   contained  in   above   described  gin  house 

building. 

4.  $ On    boiler    room,    built    of ,    with roof, 

situated feet  from  the  above  described  gin  house. 

5.  $ On  engine  and  boiler  and  settings,  pumps,  smokestacks 

and  heater  only  while  contained  in  above  described  boiler  room 
and/or  gin  house. 

6.  $ On story  cotton   house,   built  of.... ,    and 

covered  with ,  situated feet  from  the  above  de- 
scribed gin  house. 

7.  $....0n  assured's  cotton,  ginned  and  unginned,  only  while 
contained  in  said  cotton  house. 

8.  $....0n  cotton  ginned  and  unginned,  held  in  trust  or  on 
commission,  for  which  assured  may  be  liable  only  while  contained 
in  said  cotton  house. 

9.  $ On story  seed  house,  built  of ,  and  cov-   ; 

ered  with ,    situate feet   from   the    above    described   : 

gin  house.  t 

10.  $ On  assured's  cotton  seed  only  while  contained  in  said  c 

seed  house. 

11.  $....0n 

$ Total. 

AH  of  the  above  described  property  being  situated 


COTTON    AND    COTTON    SEED  331 

Attach  following  clauses  as  in  Ordinary  Gin  Form: — Total  In- 
surance Permitted,  ^  Value  (all  items  but  7,  8  and  10),  Owner- 
ship and  Title  and  Warranty  clauses,  and  in  addition  the  fol- 
lowing:— Cotton  Coinsurance  (Items  7  and  8),  80%  Coinsurance 
(item  10),  Night  Work  Prohibited,  Cotton  Record  and  Mixed 
Hazards  clauses;  and 

Non-Storage  of  Cotton. — That  cotton  shall  not  be  stored  in  the 
gin  house,  except  by  special  permission  endorsed  hereon,  otherwise 
this  policy  shall  be  null   and  void. 

Windows  and  Openings  to  be  Kept  Closed. — That  all  windoyvs 
and  door  openings  in  the  gin  house  shall  be  securely  locked,  boarded 
and/or  nailed  up  during  the  period  when  gin  is  not  operating. 

Profitable. — That  the  property  has  been  profitable  and  that  as- 
sured has  every  reason  to  believe  that  it  will  so  continue. 

Running  of  the  Gin. — That  the  gin  hereby  insured  will  be  in 
active  operation  during  the  ginning  season  within  the  life  of  this 
policy  and  will  not  be  idle  during  such  period. 

Cleaned. — That  every  part  of  the  plant,  particularly  the  gin 
stands,  has  been,  or  will,  before  beginning  of  operations,  be 
thoroughly  cleaned  and  shall,  during  any  ginning  season,  while  the 
policy  exists,  be  kept  clean  and  in  good  working  order. 

Smoking  Prohibited;  Also  Ginning  of  Wet  Cotton. — The  as- 
sured does  not,  and  will  not,  permit  smoking  on  or  about  the  prem- 
ises, and  will  not  permit  the  ginning  of  wet  cotton. 

Elevator  System. — That  no  elevator  system  shall  be  used  where 
the  cotton  passes  through  the  fan. 

Boiler. — That  the  boiler  is  stationary  and  not  portable,  and 
smokestack  of  same  is  sound  and  securely  braced  and  rises  above 
the  highest  point  of  the  roof. 

Water  to  be  Kept. — That  one  iron-hooped  barrel  full  of  salt 
water  and  two  metal  buckets  shall  be  continually  kept  within  ten 
feet  of  each  gin  stand,  and  in  same  room  therewith,  to  be  used 
in  case  of  fire. 

Cancellation. — That  in  event  of  cancellation  by  the  assured, 
the  company  shall  retain  not  less  than  six  months  premium  on 
policies  covering  buildings  and  machinery  and  not  less  than  two 
months  premium  on  policies  covering  gin  products  at  Gin  Short 
Rates.  Union  Short  Rate  Table  charges  applicable  to  policies  cov- 
ering only  on  cotton  in  bales. 

Special  reference  being  had  to  assured's  application,  which  is 
made  a  warranty  and  part  hereof. 

Standard  Time  Clause. — It  is  understood  and  agreed  that  the 
word  "noon"  as  used  herein,  in  designating  the  beginning  and  end- 
mg  of  the  terra  of  insurance,  refers  to  Standard  Time  at  the  place 
where  the  property  is  located. 


332  THE  AGENTS   KEY  TO   FIRE  INSURANCE 

COTTON  IN  BALES  ON  PLANTATION  OR  IN 
COUNTRY 

iS.  E.  U.  A.)  I 

(With  One  Hundred  Feet  Clear  Space  Clause)  '. 

$....0n  Cotton  in  bales,  owned  or  held  by  the  assured  in  trust,  ^ 

or  on  commission,  or  on  joint  account  with  others,  or  sold  but  not  ; 

delivered,  contained  in,  and/or  on  premises  of situate ' 

One   Hundred  Feet  Clear   Space   Clause. — Warranted  by   as-  ; 

sured  that  a  clear  space  of  not  less  than  100  feet  will  at  all  times  I 

be    maintained    between    cotton    insured    hereunder    and    any    Gin  j 

House  or  other  special  hazard.  1 

Sample  and  Weight  Clause. —  (Warranty  to  sample  and  weigh  | 

each  bale  of  cotton,   and  to  produce   such   sample   and   record   of  - 

weight  in  case  of  loss) — the  following  covenant  and  warranty  is  ; 
hereby  made  a  part  of  this  policy: 

1.  The  assured  will  take  sample  of,  and  record  the  weight  of,  i 
each   bale   of   cotton    insured    under   this    policy,    and   unless   such  j 
sample  has  been  taken,  and  weight  recorded,  this  policy  shall  not  j 
be  in  effect,  but  shall  be  null  and  void  until  such  sample  has  been 
taken  and  weight  recorded.  . 

2.  The  assured  will  keep  such  samples  and  record  of  weights  j 
in  some  place  not  exposed  to  a  fire  which  would  destroy  the  cotton  j 
insured. 

In  the  event  of  failure  to  produce  such  samples  and  record  of  . 

weights  for  the  inspection  of  this  Company,  this  policy  shall  be-  - 

come  null   and  void,  and  such  failure  shall  constitute  a  perpetual  | 

bar  to  any  recovery  thereon.  ' 

Any   loss   that  may   be    ascertained   and   proven    to   be   due   the  ;:; 

assured  under  this  policy,  shall  be  held  payable  to as  in-  i 

terest  may  appear,  subject,  nevertheless,  to  all  the  terms  and  con-  j 

ditions  of  this  policy.  i 

(Attach    Cotton    Co-Insurance,    Lightning,    Standard    Time    and 
O.  I.  P.  clauses.) 


BALED  COTTON,  SEED  COTTON  AND  COTTON 

SEED  ON  GINNERY  PREMISES 

(S.  E.  U.  A.) 

$ On  cotton  ginned  and  unginned,  baled  and  unbaled,  seed  | 

cotton,  cotton  seed,  including  sacks  or  packages  containing  same,  and  I 
bagging  and  ties,  only  while  contained  in  cotton  houses  or  sheds,  | 
seed  houses  or  sheds  and  while  passing  through  the  cotton  ginnery  1; 
and  while  in  wagons  on  premises,  or  on  the  ginnery  yard  or  prem-  '; 
ises;  also  in  or  on  cars  within  two  hundred  feet  of  gin  premises,  r. 
This  insurance  attaches  on  cars  only  when  bill  of  lading  has  not  ;j 


COTTON  AND  COTTON  SEED  333 

been  signed.  Their  own  or  held  by  them  in  trust  or  on  commission 
or  sold  but  not  delivered,  or  being  ginned  or  handled  for  assured's 
own  account,  or  for  the  account  of  others  and  for  which  the  assured 
may  be  liable. 

$ On  cotton  seed,  including  sacks  or  packages  containing  same, 

only  while  contained  in  the  seed  houses  or  sheds  and  while  in 
wagons  on  premises,  or  on  ginnery  yard  or  premises;  also  in  or  on 
cars  within  two  hundred  feet  of  gin  premises.  This  insurance 
attaches  on  cars  only  when  bill  of  lading  has  not  been  signed. 
Their  own  or  held  by  them  in  trust  or  on  commission  or  sold  but 
not  delivered,  or  being  ginned  or  handled  for  assured's  own  ac- 
count, or  for  the  account  of  others  and  for  which  the  assured  may 
be  liable 

All  of  the  above  described  property  being  located  on  the  prem- 
ises  known    as ginnery   in   the    town    of County   of 

State  of 

Other  insurance,  warranted  concurrent  herewith,  permitted  with- 
out notice  until  required. 

Any  loss  that  may  be  ascertained  and  proven  to  be  due  the  as- 
sured under  this  policy  shall  be  held  payable  to as  interest 

may  appear,  subject,  nevertheless,  to  all  the  terms  and  conditions 
of  this  polic}'. 

(Attach  Cotton  Co-Insurance  (Item  1)  80%  Co-Insurance  (Item 
2),  Replacement,  Lightning  and  Standard  Time  clauses.) 

COUNTRY   COTTON   FLOATER— UNLIMITED 

(L.  F.  P.  B.) 

(On    Plantation    and    Awaiting    Shipment) 

$ On   cotton,   ginned   and   unginned,  baled    and   unbaled,   his 

own  or  held  in  trust  or  on  commission,  for  which  assured  may  be 
liable.  All  while  contained  in  the  Cotton  House,  in  or  around 
the  Gin  House,  or  on  the  premises  of  the  assured  or  in  transit, 
from  the  plantation  of  assured  to  any  railroad  or  river  landing, 
and  to  cover  at  such  railroad  point  or  landing  until  bill  of 
lading  has  been  issued,  but  in  no  event  to  cover  after  such  bill 
of  lading  has  been  issued. 

All   of  the   above   property  being   situated 

It  is  also  understood  and  agreed  that  this  company  shall  be 
liable  only  for  such  proportion  of  the  whole  loss  as  the  amount 
of  this  insurance  bears  to  the  cash  value  of  the  whole  property 
hereby  insured  at  the  time  of  the  fire. 

Other  concurrent  insurance  permitted, 

(Attach  Record  Warranty,  Cotton — Right  of  Replacement  Notice, 
Loss  Payable  Clause.) 


334  THE  AGENTS   KEY  TO  FIRE  INSURANCE  ' '■ 

CLOSE   WAREHOUSE  and/or   COMPRESS 

(S.   E.    U.   A.)  ! 

$....0n  Cotton  in  bales,  owned  or  held  by  the  assured  in  trust,   1 
or  on  commission,  or  on  joint  account  with  others,  or  sold  but  not 

delivered,  only  while  contained  in  the story build-   i 

ing,   with roof,   situated   No on   the side   of  J 

Street,    Block    No ,    known    as Warehouse  ' 

and/or  Compress,  in '  | 

This  insurance  is  effected  subject  to  the  following  conditions, 
which   are   accepted   as  parts  of  this   contract: 

(Attach  Co-Insurance,,  Replacement  and  Standard  Time  clauses 
and  O.  I.  P.  and  other  usual  clauses.)  j 

ij 

OPEN    WAREHOUSE    AND/OR    COMPRESS 

(S.   E.    U.   A.)  \ 

Same  as  foregoing  form  with  the  following  clause  added:  j 

Warranted  by  the   assured  that  no  cotton  will   be  left  outside  • 

of  sheds  or  beyond  the  apron  of  roof  in  the  court  at  night  or  on  ] 

Sundays   and  holidays.     And   at   all   times,  while   cotton  is  being  \ 

kept  or  handled  in  open  court,  a  clear  space  of  not  less  than  eight  i 

feet  shall   be   maintained   between   the   cotton   in   open    court   and  ] 
apron  of  roof. 

COTTON  COMPRESS  BUILDINGS  AND  MACHINERY  | 

{Specific)    {S.  E.  U.  A.)  J 

$ On  their Compress  Building,  with roof  and  \ 

Cupola,  and  so  much  of  platforms  as  are  under  said  roof.  I 

$ On  their  platforms  not  covered  by  said  Compress  roof.  i 

$ On  their  compress,  machinery,  boilers,  smokestacks,  drums,  | 

heaters,  pumps,  water  tanks  and  all  connections,  including  founda-  J{ 
tions  and  settings. 

$ On  their  compress  tools,  trucks,  scales,  hose,  furniture  and 

fixtures,  fuel  and  supplies.  All  while  contained  in  the  above  de-, 
scribed  building  or  on  premises  of  Compress  Company,  situated 
in 

(Attach  Other  Concurrent  Insurance,  Full  Coinsurance,  Me- 
chanics, Electric,  Lightning  and  Dynamo,  Cease  Operations,  No 
Smoking,  and  Subrogation  clauses.  |: 

COMPRESS  FORM   (BLANKET)  § 

{S.  E.  U.  A.)  \, 

$....On   the  Buildings    and   Structures  constituting   their   entire  [■ 

Plant,    used    for    Compress    and    Warehouse    purposes;     and    on  |j 

Compress  and  other  Machinery  and  their  spare  parts  and  repairs;  " 

r 


COTTON  AND  COTTON  SEED  335 

Boilers,  Engines,  their  appurtenances  and  connections.  Smoke- 
stacks, Drums,  Water  Tanks,  Pumps  and  other  power  equipment; 
fire  extinguishing  apparatus,  including  hose,  automatic  sprinkler 
system,  electrical  equipment  for  power  and  lighting:  Office,  Cora- 
press  and  Warehouse  Furniture  and  Fixtures  and  Supplies;  Trucks, 
Tools,  Scales,  Signs,  Awnings,  Fuel  and  Supplies  used  in  and 
with  their  business;  all  while  contained  in  buildings  or  on  premises 
of  the   Compress   Company,   situated in and  known 


Buildings  described  above  are  built  of with roof. 

In  the  event  that  an  aggregate  claim  for  any  loss  is  less  than 
Ten  Thousand  Dollars  ($10,000)  (provided,  however,  such  amount 
does  not  exceed  five  per  cent  (5%)  of  the  total  amount  of  insurance 
upon  the  property  described  herein  and  in  force  at  the  time  such 
loss  occurs)  no  special  inventory  or  appraisement  of  the  undamaged 
property  shall  be  required.  If  this  policy  be  divided  into  two 
or  more  items,  the  foregoing  conditions  shall  apply  to  each  item 
separately. 

Lightning  and  Electrical  Apparatus  Clause. — This  policy 
also  covers  direct  loss  or  damage  to  the  property  insured,  by 
lightning  (meaning  thereby  the  commonly  accepted  use  of  the 
term  "Ughtning,"  and  in  no  case  to  include  loss  or  damage  by 
cyclone,  tornado  or  windstorm)  whether  fire  ensues  or  not;  it 
being  made  a  condition  of  this  contract  that  any  loss  or  damage 
to  dynamos,  exciters,  lamps,  switches,  motors  or  other  electrical 
appliances  or  devices,  such  as  may  be  caused  by  lightning  or 
other  electrical  currents,  artificial  or  natural,  is  expressly  ex- 
cluded, and  that  this  Company  is  liable  only  for  such  loss  or 
damage  to  them  as  may  occur  in  consequence  of  fire,  originating 
outside  of  the  appliance  or  device  itself.  It  is  also  a  condition 
of  this  contract  that  if  there  is  other  insurance  upon  the  property 
damaged  this  Company  shall  be  liable  only  for  such  proportion 
of  any  direct  loss  or  damage  by  lightning  (except  as  above  stated) 
as  the  amount  hereby  insured  bears  to  the  whole  amount  insured 
thereon,  whether  such,  other  insurance  contains  a  similar  clause  or 
not. 

(Attach  same  clauses  as  in  preceding  form.) 

LIMITED   FLOATER 

(S.  E.    U.   A.) 

$ On  Cotton  in  bales,  owned  or  held  by  the  assured  in  trust, 

or  on  commission,  or  on  joint  account  with  others,  or  sold  but  not 
delivered,  contained  in  the  following  specifically  described  Ware- 
houses, Compresses  and  Wharves,  including  sidewalks,  platforms 
and  streets  adjacent  thereto;  also  while  in  transit  through  streets 

between    localities   named    herein,    namely: all    situated    in 

the  city  of 


336  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

d 

It  is  understood  and  agreed  to  be  a  condition  of  this  insurance  j 

that  this  policy  shall  cover  cotton  at  Compresses,  the  fact  of  bills  i 

of  lading  having  been  signed  for  the  same  notwithstanding.  1 

(Attach  Co-Insurance,  Replacement  and  Standard  Time  clauses.)  ' 

GENERAL  FLOATER  ] 

(S.   E.    U.   A.)  \ 

$ On  Cotton  in  bales,  owned  or  held  by  the  assured  in  trust,  | 

or  on  commission,  or  on  joint  account  with  others,  or  sold  but  not  ,] 

delivered,  in  all  or  any  of  the  Stores,  Presses,  Warehouses,  Sheds,  ] 

Yards,  Railroad  Yards  and  Wharves  ( excepted),  or  while  * 

in  transit  in  or  while  on  any  of  the  streets  in : 

It  is  understood  and  agreed  to  be  a  condition  of  this  insurance  j 

that  this  policy  shall  cover  cotton  at  any  of  the  presses   ( I 

excepted),  the  fact  of  bills  of  lading  having  been  signed  for  the  \ 

same  notwithstanding.  1 

(Attach  Co-Insurance,  Replacement  and  Standard  Time  clauses.)  I 

GENERAL  FLOATER  \ 

{L.  F.  P.  B.)  i 

Covering   Within   Entire   Stable  i 

$ On   cotton  in   bales,   their   own  or  held  by  them   in   trust,  j 

or    on    commission,    or   purchase    for    their    account   by    agents    of  i 
the    assured   wherever   the    said   cotton   may   be    within   the    State  jj 

oi""-"'  ....  i 

Subject  to  the   following  conditions,  viz.:  >\ 

1.  It  is  understood  and  agreed  that  cotton  is  not  covered  while  ' 
in  or  on  the  premises  of  the i 

2.  There  shall  be  no  liability  under  this  policy  for  cotton  while  ' 
in  the  custody  of  common  carriers. 

3.  It  is  understood  and  agreed  that  this   Company  shall  not  be  , 

liable  in  excess  of per  cent  of  the   amount  insured  under- 

this  policy  by  reason  of   any  one   fire.  { 

4.  It  is  also  agreed  and  understood  to  be  a  condition  of  this  ; 
insurance  that  this  policy  shall  not  apply  to  or  cover  any  cotton  }, 
which  may  at  the  time  of  loss  be  covered  in  whole  or  part  by  j 
or  under  protection  of  any  Marine  Insurance  Company,  and  | 
further,  it  is  understood  and  agreed  that  the  assured  shall  at  > 
all  times  maintain  insurance  on  the  property  insured  by  this  v 
policy  equal  to  the  actual  cash  value  thereof,  and  on  each  item  ; 
of  the  same,  and  the  failing  so  to  do,  the  assured  shall  be  an 
insurer  to  the  extent  of  such  deficit,  and  in  that  event  shall  bear  I 
his,  her  or  their  proportion  of  any  loss  on  such  property,  and  | 
this  Company  shall  be  liable  for  not  exceeding  such  proportion! 
of  the  loss  or  damage  as  the  amount  insured  by  this  policy  shall  1 


COTTON  AND  COTTON  SEED  337 


bear  to  the  actual  cash  value  of  such  property  at  the  time  of  the 
fire  in   all   localities  covered  by  this  policy. 

Other  insurance,  concurrent  herewith,  permitted  without  notice 
until   required. 

COTTON  FORM 

(L.  F.  P.  B.) 

Transportation  Line's  Liability  in  Compress 
$....0n  their  liability  for  loss  or  damage  by  fire  to  cotton  in 
bales  while  in  the  custody  of  the  hereinafter  named  Compress 
Company  or  Companies,  for  the  account  of  this  assured,  including 
(except)  cotton  loaded  and/or  being  loaded  on  cars  for  which 
cotton  no  bill  of  lading,  or  compress  receipt  exchangeable  by  its 
terms  for  a  bill  of  lading,  has  been  issued;  all  while  contained 
in  any  of  the  compresses,  sheds,  platforms  and/or  yards  on  their 
premises  and/or  on  grounds  immediately  adjacent  thereto  and 
in  cars  on  switch  tracks  of  said  Compress  Company  or  Companies, 

situate  at  and  known  as Louisiana. 

It  is  hereby  agreed  that  the  existence  of  a  chattel  mortgage 
covering  the  cotton  itself  shall  not  constitute  an  avoidance  of 
this  policy. 

(Attach   Cotton   Co-Insurance    Clause.) 

COTTON  FORM 

(L.  F.  P.  B.) 
Compress  Liability  to  Transportation  Lines 

$....0n  their  liability  to  the  transportation  line  or  lines,  here- 
inafter named,  by  virtue  of  a  mutual  contract  between  this  assured 
and  the  said  transportation  line  or  lines,  for  loss  or  damage  by 
fire  to  cotton  in  bales  in  the  custody  of  this  assured,  for  the 
account  of  such  transportation  line  or  lines  including  (except) 
•  cotton  loaded  and/or  being  loaded  on  cars  for  which  cotton  no 
bill  of  lading,  or  compress  receipt  exchangeable  by  its  terms  for 
a  bill  of  lading,  has  been  issued;  all  while  contained  in  the 
compress  or  compresses,  sheds,  platforms  and/or  yards  or  the 
premises  and  on  the  grounds  immediately  adjacent  thereto,  and  in 
closed  cars  on  the  switch  tracks  of  said  Compress  Company^ 
situate   at 

(Attach  Cotton  Co-Insurance  Clause.) 

Note: — If  it  be  desired,  the  above  form  may  be  used  to  cover 
cotton  in  different  compresses  in  several  localities  or  towns,  but. 
at  rate  not  less  than  6  per  cent. 

When  this  form  is  used  to  cover  in  more  than  one  compress, 
to  be  subject  to  the  following  clause,  viz.: 

"It   is   understood    and   agreed   that   this   company   shall    not   be 

liable  in  excess  of per  cent,  of  the  amount  insured  under 

this  policy  by  reason  of  any  one  fire." 


338  THE  AGENTS   KEY  TO  FIRE  INSURANCE  • 

COTTON  FORM— COMMON  CARRIER 

(L.  F.  P.  B.) 

On  cotton  in  bales  for  which  bills  of  lading  have  been  issued  i 
by    their    duly    authorized    agents,    and    for    which    they    shall    be  i 

liable,  while   contained  in   and  on  premises   of  the in  the  I 

City  of Louisiana.  ! 

(Attach   Cotton   Co-Insurance   Clause.)  : 


COTTON  FORM 

{L.  F.  P.  B.)  \ 

Terminal  Properties  ; 

(Form  for  Liability  as  Common  Carrier  and  (or)  Warehouseman)  - 
$....0n  its  legal  liability  as  a  common  carrier  and  (or)  ware- « 
houseman  for  goods  and  merchandise  of  every  description — except  ' 
(including)  cotton  for  which  bills  of  lading  have  been  issued  and  1 
are  outstanding;  also  on  its  liability  upon  its  agreement  (if  any)  1 
to  indemnify  owners  of  such  goods  against  loss  or  damage  by  j 
fire;  also  on  its  own  goods  and  merchandise.  1 

All  at  its  terminal  at while  contained  m Louisiana.  1 

This  policy  also  covers  earned  freight  charges.  I 

Other   insurance,   concurrent  herewith,   permitted  without   notice  - 
until  required. 

Note: — When   cotton   is   covered,   the   cotton   co-insurance   clause  I 
is  to  be  used  in  all  cases.  { 


COTTON  FORM 

(L.  F.  P.  B.) 
Excess  Insurance 

The   assured  warrants  to  maintain   and  carry   insurance  which 

is  to  cover  all  of  any  loss  up  to  at  least  $ or,  in  the  event 

of   failure   so   to   do,   to   bear   all    of    any   loss    up   to   the    amount^ 
warranted. 

This  insurance  shall  attach  only  to  pay  a  loss  greater  than 
$....,  and  shall  pro-rate  in  the  payment  of  same  with  all  other i^ 
excess  insurance,  but  in  no  event  shall  pay  more  than  such  pro-  ' 
portion  of  any  loss  sustained  by  the  assured,  over  and  above  i 
$....,  as  the  amount  of  this  insurance  bears  to  the  excess  in? 
value  of  the  cotton  over  $ .  ^ 

Note: — The  above  form  may  be  written  at  seventy-five  per  cent.  i! 
of  the  regular  rate  only  when  $100,000  or  more  initial  insurance  * 
is  carried  and  warranted  to  be  maintained. 


COTTON  AND  COTTON  SEED  339 

COTTON  FORM 

(L.  F.  P.  B.) 
Excess  Insurance 

It  is  understood  and  agreed  that  the  following  clause  is  incor- 
porated in  the  marine  cotton  cover,  and  it  is  agreed  that  the  same 
shall  be  recognized  in  the  adjustment  of  any  loss  under  this 
policy,  viz.: 

"This  policy  does  not  attach  to  or  cover  the  risk  of  fire  on  any 
cotton  which  is  fully  covered  by  general  or  specific  fire  insurance; 
that  is,  insurance  under  a  form  of  policy  covering  at  a  specific 
place. or  places;  but  on  cotton  which  is  covered  in  part  by  such 
general  or  specific  fire  insurance,  the  amount  insured  hereunder 
against  loss  or  damage  by  fire  shall  be  the  difference  between  the 
amount  covered  by  such  fire  insurance  and  the  full  value  of  the 
cotton,  and  the  amount  so  insured  hereunder  shall  be  deemed 
concurrent  insurance  with  the  said  fire  insurance  and  liable  for 
not  exceeding  such  a  proportion  of  the  whole  loss  as  the  amount 
so  insured  hereunder  bears  to  the  full  value  of  the  cotton." 

Note: — To  be  used  when  only  a  nominal  amount  is  carried  by 
Marine  Companies.  The  rate  on  policies  having  this  endorse- 
ment to  be  the  full  and  regular  rate  where  the  policies  cover. 

COTTON  FORM 

(L.  F.  P.  B.) 

On  its  legal  liability  as  a  common  carrier  and  (or)  warehouse- 
man for  merchandise  for  which  bills  of  lading  have  been  issued 
and  are  outstanding;  also  on  its  liability  for  merchandise  which 
it  has  agreed  to  insure ;  also  on  its  own  merchandise.  All  at  its 
seaboard  terminal  at while  contained  in Louisiana. 

This  policy  also  covers  earned  freight  charges. 

Other  insurance,  concurrent  herewith,  permitted  without  notice 
until  required. 

Note: — When  cotton  is  covered,  the  cotton  co-insurance  clause 
is  to  be  used  in  all  cases. 

Note: — Quite  a  large  proportion  of  the  fire  insurance  on 
cotton  is  written  under  marine  contracts,  principally  for 
those  known  in  the  trade  as  buyers,  who  purchase  cotton 
in  many  places  and  concentrate  it  in  one  or  more  localities, 
delivering  from  there  to  all  parts  of  the  world.  The  policy 
is  drawn  to  cover  all  of  the  buyer's  cotton  from  time  of 
purchase  to  the  time  of  delivery  and  monthly  reports  are 
made  with  payments  of  premium  accordingly. 

The  Cotton  Insurance  Association  writes  a  cover  similar 
to  that  of  the  marine  companies  just  described  but  cannot 


340  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

i 

extend   such   cover  outside   the  United  States.     A  copy  of  j 
the  form  used  is  as  follows:  ! 

i 

BUYER'S  TRANSIT  \ 

1.  This  insurance  covers  cotton  in  bales  in  the  United  States,  ( 
while  owned  by  or  legally  at  the  risk  of  the  Assured,  except  as  •■ 
hereinafter  provided.  • 

2.  This  insurance  shall  not  cover  cotton  for  which  any  carrier  j 
or  bailee  may  be  liable,  or  shipped  under  bill  of  lading  containing  { 
a  stipulation  that  the  carrier  may  have  the  benefit  of  any  insurance  j 
thereon.  However,  upon  presentation  of  proof  of  a  loss  to  cotton 
described  in  Paragraph  One  of  this  form,  while  in  possession  of  ] 
any  carrier  or  other  bailee,  this  Company,  provided  that  all  ; 
provisions  of  this  policy  have  been  complied  with,  will  advance  ' 
to  the  Assured  or  the  holder  of  a  certificate  issued  as  provided 
herein,  as  a  loan,  the  amount  of  the  damage  to  said  cotton,  ' 
repayable  only  to  the  extent  of  any  recovery  from  such  carrier  ; 
or  other  bailee.  This  insurance  shall  not  cover  where  any  carrier  ^ 
or  other  bailee  has  insurance  which  would  attach  if  this  policy  \ 
had  not  been  issued,  and  shall  not  inure  to  the  benefit  of  any  ; 
carrier  or  other  bailee.  j 

3.  No  cotton  under  contract  of  purchase  by  the  assured  shall  j 
be  deemed  at  risk  hereunder  unless  its  location  with  its  marks  I 
and  numbers  be  stated  in  contract  of  purchase  or  in  a  confirmation  ', 
furnished  to  the  purchaser  prior  to  loss.  : 

4.  This  policy  shall  not  cover  cotton  after  it  has  become  water-  •■ 
borne.  '\ 

5.  Certificates   delivered  to  the  Assured  by  this   Company  may  j 
be    issued    by   the    Assured,    prior   to   loss,    on    shipments    to   final  t 
destination,  making  the  loss,  if  any,  payable  to  the  holder  thereof,  j 
provided  that  memoranda  of   such  certificates  shall   be  mailed  to  | 
this    Company    on    day    of    issue.      The    amounts    and    values    as 
stated   in   such  certificates  shall   be  applicable  to  this  policy,  and 
said   certificates   shall   take   the   place   of   the   original    policy,   and 
convey  all  the  rights  of  the  Assured  (for  the  purpose  of  collecting) 
to  the  holders  of  the  certificates,  but  the  holders  of  such  certificates, 
other    than    the    Assured,    shall    not    be    held    liable    for    unpaid 
premium. 

6.  No  liability  shall   attach  or  advance  be  made  on  cotton  sold  J 
free  on  board  cars  at  point  of  destination,  where  loss  occurs  after 
carriers'    liability    attaches,    unless    certificates    have    been    issued  X 
thereon  as  provided  herein.  t 

7.  On  shipments  to  final  destination  by  all  rail  routes  for  which  f 
certificates  are  issued,  such  certificates  are  effective  from  the  j; 
moment  the  cotton  has  been  actually  delivered  into  the  custody  " 
of  railroad  and  is  under  its  bill  of  lading  to  final  destination  r. 
until    delivery   to   warehouse   or   mill,   provided   such   delivery   is   i 


COTTON  AND  COTTON  SEED  341 

made  within  five  days  after  arrival  at  destination,  and  such  certifi- 
cate shall  be  ineffective  if  delivery  is  stopped  or  delayed  by  order 
of  the  Assured  or  the  holder  of  such  certificates. 

8.  It  is  warranted  that  when  this  policy  becomes  effective  the 
Assured  shall  report  to  this  Company  all  cotton  owned  by  or 
legally  at  the  risk  of  the  Assured,  and  thereafter  to  report  daily 
(Sundays  and  holidays  excepted)  all  purchases,  sales  and/or  ship- 
ments of  cotton,  with  values  of  the  same,  including  in  these  reports 
all  cotton  under  bills  of  lading,  and  to  pay  to  the  Company 
premiums  thereon  at  the  following  rates: 

9.  On  cotton  sold  prior  to  shipment  and  on  cotton  on  which  the 
risk  ceases  upon  the  issue  of  bill  of  lading  by  a  common  carrier, 
if  at  risk  in  any  location  classified  as: 

Initial  Rates 

"AA" — Five  cents  (5c)  per  $100.  of  value  of  such  sales 
and/or  shipments; 

"A" — Seven  cents  (7c)  per  $100.  of  value  of  such  sales 
and/or  shipments; 

"BB" — Nine  cents  (9c)  per  $100.  of  value  of  such  sales 
and/or  shipments; 

"B" — Twelve  and  one-half  cents  (12^c)  per  $100.  of  value 
of  such  sales  and/or  shipments; 

"C" — Eighteen  and  three-quarters  cents  (18>^c)  per  $100.  of 
value  of  such  sales  and/or  shipments. 

"D" — Twenty-five  cents  (25c)  per  $100.  of  value  of  such 
sales  and/or  shipments. 

10.  If  the  cotton  so  sold  or  shipped  is  at  risk  for  an  average 
time  greater  than  ten  days,  an  additional  charge  for  each  day 
or  fractional  part  thereof  in  excess  of  the  said  ten  days  will 
be  made  in  accordance  with  the  following  schedule: 

Holding  Time  Rates 

"AA"— One-fifth  of  one  cent  (l/5c)   per  $100.  per  day; 

"A" — One-quarter  of  one  cent  (l/4c)   per  $100.  per  day; 

"BB" — Three-tenths  of  one  cent  (3/lOc)   per  $100.  per  day; 

"B"— One-half  of  one  cent   (l/2c)   per  $100.  per  day; 

"C" — Five-sixths  of  one  cent   (5/6c)    per  $100.  per  day; 

"D" — One  and  one-sixth  cents  (1  l/6c)  per  $100.  per  day. 
It  is  further  understood  and  agreed  that  in  the  event  cotton  held 
at  locations  of  the  same  classification  is  at*  risk  during  any 
calendar  month  for  an  average  time  of  less  than  ten  days,  the 
Assured  shall  receive  a  credit  on  the  premiums  at  the  holding 
time  rate  applicable  to  such  classifications,  as  above,  such  credit 
in  no  case,  however,  to  exceed  the  total  charge  made  in  that 
calendar  month  for  holding  time  (time  in  excess  of  ten  days) 
at  other  locations  of  different  classifications.  It  is  agreed,  however, 
that  in   the    event   the   cotton   sold   or   shipped   during   the   entire 


342  THE  AGENTS   KEY  TO   FIRE  INSURANCE 

season  is  at  risk  for  an  average  time  greater  than  forty  days, 
for  each  additional  day  or  fraction  thereof,  the  Assured  shall 
receive  a  credit  of  one  tenth  of  one  cent  (1/lOc)  per  One  Hundred 
Dollars   ($100.)  of  value  on  the  holding  time  premium. 

11.  On  cotton  to  final  destination  under  certificates,  as  herein 
provided  for,  seven  and  one-half  (7^c)  cents  per  $100.  of  the 
value  of  such  shipment  in  addition  to  the  above  rates. 

12.  In  event  of  loss  by  fire  the  Assured  will  pay  the  premium 
as  above  on  the  ascertained  value  of  cotton  on  which  any  loss 
may  be  paid  just  as  though  said  cotton  had  been  sold  or  shipped. 

13.  In  case  this  policy  is  not  renewed  when  it  expires,  or  if 
terminated  before  expiration,  the  Assured  will  pay  premium  as 
above  on  the  cash  value  of  whatever  stock  of  cotton  remains  on 
hand  upon  the  termination  of  this  policy  just  as  though  said 
cotton  had  been  sold  or  shipped  the  day  of  termination. 

14.  Premiums  under  this  policy  for  each  month  shall  be  payable 
on  or  before  the  fifteenth  (15th)  day  of  the  succeeding  month. 
In  case  of  default  of  such  payment,  this  policy  may  be  cancelled 
by  this  Company  upon  twenty-four  (24)  hours'  written  or  tele- 
graphic notice  to  the  Assured,  and  at  the  expiration  of  such 
notice  all  risk  hereunder  shall  terminate  except  as  to  shipments 
under  certificates  issued  prior  to  receipt  of  such  notice. 

15.  If  cotton  is  located  in  a  State  other  than  that  in  which  this 
policy  is  issued,  the  same  will  be  covered  by  a  certificate  adopting 
the  terms  and  conditions  of  this  policy,  issued  by  a  Resident  Agent 
of  said  other  State  under  the  laws  thereof,  which  certificate  will 
be  furnished  to  the  Assured. 

16.  This  Company  shall  not  be  liable  for  more  than  such  pro- 
portion of  any  loss  as  the  limit  of  liability  mentioned  below 
applying  at  the  place  where  any  loss  or  damage  shall  occur 
bears  to  the  total  value  of  cotton  at  such  location  at  the  time 
of  any  loss  or  damage.  The  amount  of  the  insurance  applying 
at  the  place  of  a  loss  shall  be  the  limit  of  liability  herein  named 
where  the  value  at  risk  hereunder  at  such  place  exceeds  such 
limit,  and  in  all  other  instances  the  value  at  risk  hereunder  at 
such  place. 

17.  It  is  agreed  that  the  limit  for  loss  by  any  one  fire  or 
conflagration   shall    not   exceed ($....)    Dollars. 

This  limit  does  not  apply  where  certificates  have  been  issued 
as  provided  herein. 

18.  Payments  or  advances,  if  any,  on  damage  before  certificates 
are  issued  shall  be  made  to  banks  or  other  parties  having  made 
advances  against  said  cotton,  as  their  interest  may  appear,  pro- 
vided this  Company  receives  written  notice  of  such  interest  within 
ten  days  after  such  damage. 

19.  This  Company  shall  not  be  liable  for  more  than  the  actual 
cash  value  of  the  cotton  at  the  time  and  place  of  fire,  which  shall 


COTTON  AND  COTTON  SEED  343 


in  no  event  exceed  what  it  would  then  and  there  cost  to  replace 
with  cotton  of  like  kind  and  quality,  or  of  equivalent  value. 

20.  The  assured  under  this  policy  hereby  covenants  and  agrees 
to  keep  a  set  of  books,  showing  a  complete  daily  record  of  all 
cotton  handled,  showing  among  other  things  the  weight  and 
classification  of  each  bale  and  all  purchases,  sales  and/or  ship- 
ments, with  the  identity  of  each  bale  and  its  location  and  removal 
from  yards  or  compresses  to  other  locations,  and  in  case  of  loss 
to  produce  such  books  to  this  Company  or  this  policy  shall  be 
void. 

21.  The  Assured  agrees  that  this  Company  by  a  properly  author- 
ized representative,  shall  be  permitted  to  examine  the  books  of 
the  Assured  and  any  (or  all)  of  their  agents,  employees  and 
correspondents  at  any  time. 

22.  If  any  carrier,  bailee  or  other  person  has  been  or  shall 
hereafter  be  released  from  any  liability  for  loss  or  damage  to 
any  cotton  hereunder,  this  policy  shall  be  null  and  void. 

23.  This  Company  reserves  the  right  to  cancel,  on  five  days' 
notice  to  the  Assured,  all  liability  hereunder  at  any  location 
where  recommendations  for  the  protection  of  cotton,  made  by 
this  Company,  are  not  complied  with.  This  Company  also  re- 
serves the  right,  upon  five  days  notice  to  the  Assured,  to  alter 
rates  at  any  locations  where  conditions  are  unusually  hazardous, 
or  when  the  Company's  requirements  for  the  safe  handling  of 
cotton  are  not  observed. 

24.  Upon  receipt  of  advice  of  a  loss  by  the  Assured,  immediate 
notice  shall  be  given  to  this  Company  and  it  may  investigate  the 
circumstances  attending  same  and  ascertain  the  amount  of  loss 
without  such  action  operating  to  waive  any  forfeiture  or  admit 
any  liability,  but  all  claims  to  be  payable  after  expiration  of 
fifteen  (15)  days  from  receipt  of  such  notice,  provided  satisfactory 
proofs  have  been  filed. 

25.  This  insurance  does  not  protect  the  Assured's  liability  as 
bailee. 

26.  No  other  insurance  permitted  without  the  written  consent 
of  this  Company  endorsed  hereon. 

COTTON  SEED  OIL  MILLS 

(S.  E.  U.  A.) 

Oil  Mill,  situate  on  premises  of  assured,  at  or  near 

This  policy  covers  to  the  extent  of  $ being  pro  rata  part  of 

each  of  the  following  items: 

(It  is  understood  and  agreed,  however,  that  no  part  of  this  in- 
surance attaches  or  applies  to  any  building  or  buildings  listed 
below,  nor  to  their  contents,  except  where  a  specific  amount  is 
placed    opposite    such    building,    and    then    applies    specifically   to 


344 


THE  AGENTS   KEY  TO   FIRE  INSURANCE 


buildings,  and/or  contents,  only  in  the  sum  set  opposite  each  such 
building.) 

$ On  Buildings   and  connections,   including  stacks,   plumbing 

and  piping,  except  for  fire  extinguishing. 

$ On    machines,    machinery,    appurtenances    and    appliances, 

boilers,  engines,  pumps,  including  all  connections,  implements, 
tools,  utensils,  electric  light  equipment,  fire  extinguishing  appa- 
ratus, tanks  in  or  on  buildings,  towers  or  scaffolds,  vehicles  of  all 
kinds,  office  furniture,  furnishings  and  fixtures,  iron  safes,  printing 
and  writing  machines,  stationery  supplies,  and  all  material  and 
extra  parts,  only  while  contained  in  building  or  buildings  specified 
below: 


(1) 

(22) 
(3) 
(4) 
(5) 
(6) 
(7) 
(8) 

(9) 
(10) 


DESCRIPTION 


On  the story 

On  the story 

On  the story 

On  the story 

On  the story 

On  the story 

On  the story 

On  Boilers.     Engines 

contained   in  above 

On  Track    Scales    . . . 

On  Track  or  Tower    ( 


roof  Main   Mill   BuUding 

roof  Seed  House  No 

roof  Seed  House  No 

roof  Hull    House 

roof  Meal     House 

roof  Office     Building.... 

roof  Boiler     House 

and  Connections  while 
described  boiler  house . . 


not   in   or  on  buildings) . 


TOTALS 


Amount  insured 

on 

Buildings,  Etc., 

Per  Ist  Item 


Amount  Insured 

•n 

Machinery,  Etc., 

Per  2d  Item 


Total  insurance  permitted  warranted  concurrent  herewith,  in- 
cluding this  policy,  as  follows: 

$ on  item  1;  $ on  item  2;  $ on  item  3;  $ on  item  4; 

$ on  item  5;  $ on  item  6;  $ on  item  7;  $ on  item  8; 

$ on  item  9;  $ on  item  10. 

It  is  understood  and  agreed  that  no  insurance  in  addition  is 
permitted  to  this  policy  unless  the  total  insurance,  including  this 
policy,  is  entered  in  paragraph  above. 

This  insurance  is  effected  subject  to  the  following  conditions, 
which  are  accepted  as  part  of  this  contract: 

Three-fourths  Value  Clause. — It  is  understood  and  agreed  to 
be  a  condition  of  this  insurance  that  in  the  event  of  loss  or  dam- 
age by  fire  to  the  property  insured  under  this  policy,  this  Company 
shall  not  be  liable  for  an  amount  greater  than  three-fourths  of 
the  actual  cash  value  of  each  item  of  property  insured  by  this 
policy  (not  exceeding  the  amount  insured  on  each  such  Item)  at 
the  time  immediately  preceding  such  loss  or  damage;  and  in  the 
event  of  additional  insurance — if  any  is  permitted  hereon — then 
this  Company  shall  be  liable  for  its  proportion  only  of  three- 
fourths  of  such  cash  value  of  each  item  insured  at  the  time  of  the 
fire,  not  exceeding  the  amount  insured  on  each  such  item. 

Fire  Protection  Clause. — In  consideration  of  the  reduced  rate 
at  which  this  policy  is  written,  it  is  hereby  made  a  condition  of  this 


COTTON  AND  COTTON  SEED  345 


insurance  that  all  of  the  private  fire  protection,  for  which  credit 
is  given  in  the  rating  on  the  within  named  property,  shall  at  all 
times  be  kept  in  good  condition  and  complete  working  order, 
whethei-  it  be  fire-plug  and  hose,  with  spanner — or  casks  of  water 
and  fire-pails — or  watchman's  clock  and  records — or  fire-pump — or 
any  other  kind  of  private  fire  protection;  and  assured  agrees  that, 
in  event  of  failure  to  do*  so,  this  policy  shall  be  null  and  void, 
unless  the  interruption  of  such  fire  protection  be  from  circum- 
stances not  within  the  control  or  knowledge  of  the  assured,  or 
which  could  not  have  been  prevented  by  the  exercise  of  due  dili- 
gence on  the  part  of  the  assured. 

(Attach  also  Mechanics,  Cease  Operations,  Work  Nights,  Light- 
ning and  Dynamo,  and  Standard  Time  clauses.) 

Note: — The  foregoing  form  is  also  used  with  the  80%  Coinsur- 
ance Clause  substituted  for  the  %  Value  Clause,  in  which  case 
the  permit  for  other  insurance  by  items  is  left  out,  and  the  following 
clause  substituted: 

"Other  insurance,  warranted  concurrent  herewith,  permitted 
without  notice  until  required." 

COTTON  SEED  OIL  MILLS 
{S.  E.  U.  A.) 

(Cotton   Seed  is   almost  always  insured  separately  from  building 
and  machinery) 

Oil    Mill,    situate   on   premises   of    assured,    at   or   near 


$....0n  cotton  seed,  cotton  seed  oil  and  (or)  any  product  com- 
ing therefrom,  pertaining  to  the  production  thereof,  or  any  ma- 
terial, raw,  wrought  or  in  process,  necessary  thereto;  also  Cooper- 
age, barrels,  sacks,  bags,  bagging  and  packages  of  whatever  ma- 
terial, and  all  other  merchandise  used  in  their  industry,  their  own 
or  held  by  them  in  trust,  or  on  commission  or  consignment,  or  on 
joint  account  with  others,  or  sold  but  not  delivered  or  removed, 
or  for  which  the  assured  may  be  liable  in  case  of  loss,  only 
while  contained  in  building  or  buildings  specified  below. 

(It  is  understood  and  agreed,  however,  that  no  part  of  this  in- 
surance applies  in  any  building  or  buildings  listed  below,  except 
where  a  specific  amount  is  placed  opposite  such  building,  and  then 
applies  specifically  in  the  sura  set  opposite  each  such  building.) 


DESCRIPTION 

AMOUNT 

In  the. 

story. . 

story.. 

story., 

story.. 

story.. 

roof  Main    Mill    Building 

In  the. 

roof  Seed    House,    No 

In  the. 

roof  Seed   House,    No 

In  the. 

roof  Hull     House 

In  the. 

roof  Meal    House 

Total     

346  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

This  policy  shall  not  attach  to  nor  cover  oil  contained  in  yard 
tanks,  nor  to  stock  in  any  cotton  ginnery. 

This  insurance  is  effected  subject  to  the  following  conditions, 
which  are   accepted   as  parts  of  this  contract: 

Warranty  to  keep  books  and  inventories  and  to  produce  them 
in  case  of  loss. — The  following  covenant  and  warranty  is  hereby 
made  a  part  of  this  policy: 

1.  The  assured  will  at  the  beginning  of  each  season  take  a  com- 
plete itemized  inventory  of  all  stock  on  hand. 

2.  The  assured  will  keep  a  set  of  books,  which  shall  clearly 
and  plainly  show  a  complete  record  of  the  weight  of  all  seed 
bought  and  deposited  on  the  premises  and  a  record  of  the  yield 
of  oil  and  meal  and  a  record  of  all  stock  sold,  shipped  or  removed 
from  the  premises. 

3.  The  assured  will  keep  such  books,  inventory  and  record 
securely  locked  in  a  fire-proof  safe  at  night,  and  at  all  times  when 
the  buildings  mentioned  in  this  policy  are  not  actually  open  for 
business;  or  failing  in  this,  the  assured  will  keep  such  books,  in- 
ventory and  records  in  some  place  not  exposed  to  a  fire  which 
would  destroy  the  aforesaid  buildings. 

In  the  event  of  failure  to  produce  such  set  of  books,  inventory 
and  records  for  the  inspection  of  this  Company,  this  policy  shall 
become  null  and  void,  and  such  failure  shall  constitute  a  perpetual 
bar  to  any  recovery  thereon. 

Warranty  for  Cotton  Seed  Oil  Mills  and/or  Cotton  Seed  Oil 
Mill  Warehouses — It  is  warranted  by  the  assured  that  the  within 
described  Cotton  Seed  Oil  Mill  and/or  Cotton  Seed  Oil  Mill 
Warehouses  will  not  be  used  for  the  manufacture  or  mixing  of 
fertilizer,  or  for  the  storage  of  fertilizer  material,  or  for  the 
milling  or  storage  of  copra,  velvet,  soya,  or  other  beans,  peanuts, 
or  any  other  raw  materials,  other  than  cotton  seed  and/or  its 
products,  unless  written  permission  is  endorsed  hereon;  otherwise 
this  policy  shall  be  null  and  void,  it  being  understood  and  agreed, 
however,  that  the  above  warranties  do  not  prohibit  the  storage  of 
manufactured  fertilizer  or  of  any  materials  not  more  hazardous 
that  are  incidental  to  cotton  seed  oil  mill  business.  It  is  further 
warranted  that  no  baled  linters  \vill  be  stored  in  mill,  seed  house 
or  other  warehouses  or  buildings  comprising  this  Cotton  Seed  Oil 
Mill  plant,  or  within  60  feet  thereof,  except  such  baled  linters 
as  are  stored  in  the  baled  linter  warehouse,  otherwise  this  policy 
shall  be  null  and  void. 

(Attach  also  the  80%  Coinsurance  Clause,  Fire  Protection, 
Automobile  Permit,  O.  I.  P.  and  the  Mechanics,  Cease  Operations, 
Work  Nights,  Lightning  and  Dynamo,  and  Standard  Time  clauses.) 


COTTON  AND  COTTON  SEED  347 

COTTON  SEED  OIL  MILLS 

{S.  E.  U.  A.) 
(Blanket  Policy — Building  and  Machinery  and  Other  Articles,  with 
Ninety  Per  Cent  Co-Insurance   Clause) 
Oil    Mill,    situate   on   premises   of    assured,    at   or   near 


This  policy  covers  to  the  extent  of  $....,  being  pro  rata  part 
of  total  insurance. 

$. . . .  (total  insurance)  On  all  Buildings  and  Connections,  includ- 
ing Stacks,  Plumbing  and  Piping;  on  Machines,  Machinery,  Ap- 
purtenances and  Appliances,  Boilers,  Engines,  Pumps,  including  all 
Connections,  Implements,  Scales,  Tools,  Utensils,  Electric  Light 
Equipment,  Fire  Extinguishing  Apparatus,  Tanks,  Towers  and 
Scaffolds,  Vehicles  of  all  kinds,  Office  and  Laboratory  Furniture, 
Furnishings  and  Fixtures,  Iron  Safes,  Printing  and  Writing  Ma- 
chines, Stationery  Supplies,  and  all  Material  and  Extra  Parts 
usual  to  the  conduct  of  a  Cotton  Seed  Oil  Mill  and  Refinery, 
while  on  the  premises  above  described. 

This  insurance  is  effected  subject  to  the  following  conditions 
and  are  accepted  as  parts  of  this  contract: 

(Attach  90%  Coinsurance,  Fire  Protection,  Lightning  and 
Dynamo,  Standard  Time,  Automobile,  Mechanics,  Cease  Opera- 
tions, Night  Work,  O.  I.  P.  Clauses  and  Special  Warranty  shown 
in  last  paragraph  of  preceding  form.) 

COTTON  SEED  OIL  MILLS 

{S.  E.  U.  A.) 

(Blanket     Policy — Stock,     with     Ninety     Per     Cent     Co-Insurance 

Clause) 
Oil    Mill,    situate    on    premises    of   assured,    at   or   near 


$....0n  Cotton  Seed,  Cotton  Seed  Oil  and/or  any  product 
coming  therefrom,  pertaining  to  the  production  thereof,  or  any 
material,  raw,  wrought  or  in  process,  necessary  thereto;  also 
Cooperage,  Barrels,  Sacks,  Bags,  Bagging  and  Packages  of  what- 
ever material,  and  all  other  Merchandise  used  in  their  industry, 
their  own  or  held  by  them  in  trust,  or  on  commission  or  consign- 
ment, or  on  joint  account  with  others,  or  sold  but  not  delivered 
or  removed,  or  for  which  the  assured  may  be  liable  in  case  of 
loss;  all  while  on  the  premises  above  described,  subject  to  the 
following  conditions: 

This  policy  shall  not  attach  to  nor  cover  oil  contained  in  yard 
tanks,  nor  to  stock  in  any  cotton  ginnery. 

This  insurance  is  effected  subject  to  the  following  conditions, 
which  are  accepted  as  part  of  this  contract: 

(Attach  same  clauses  as  preceding,  also  Book  and  Inventory 
Warranty.) 


DIVISION  XIII  i 

RENT  AND  LEASEHOLD  INSURANCE  < 

This  class  of  insurance  is  written  under  special  forms  at-  ' 

tached  to   the  regular  fire  policy;   generally   speaking,   the  j 

same  permits  and  clauses  should  be  attached  (so  far  as  they  j 

apply  to  the  subject  of  insurance)  as  would  be  to  the  ordi-  i 

nary  fire  policy  covering  the  class  of  property  on  which  the  i 

rent  or  leasehold  interest  is  based.    For  instance,  a  rent  policy  ! 

on  a  dwelling  should  contain  the  permits  and  clauses  enumer-  j 

ated  under  RESIDENCE  PROPERTY  FORMS,  page  215,  | 

Rents  and  Rental  Value.    It  is  not  always  realized  that  fire,  \ 

by  rendering  a  building  untenantable,   entails  other  losses  ! 

beyond  that  to  the  structure  itself,  namely,  loss  of  income  .! 

from  rents,  or  loss  of  the  use  of  such  portion  of  the  building  ; 

as  the  owner  occupies,  or  even  a  loss  because  space  which  I 

might  be  rented  is  not  available.  i 

This  has  given  rise  to  a  form  of  insurance  against  loss  of  - 

rents  or  rental  value  which  is  coming  into  greater  demand  \ 

every  year,  as  the  fact  becomes  known  that  such  insurance  ; 

is  available.  ^ 

Rates  are  usually  somewhat  less  than  the  building  rates  • 

and  the  forms  used  cover  loss  of  rent  during  the  period  of  : 

repair  or  replacement,  being  applicable  to  all  classes  of  risks  | 

whether  dwelling,   mercantile   or  manufacturing  properties.  J 

Many  agents  are  attaching  to  all  policies  covering  dwelling  \ 

and    mercantile    properties    a    rent    endorsement    inserting  : 
therein  the  amount  of  rent  or  rental  value  of  the  property; 

then  when  delivering  policy  a  brief  explanation  is  made  of  1 

the  nature  of  the  cover,  with  the  result  that  such  insurance  ^ 

is  usually  accepted.     The  following  facts  may  be  of  assist-  ] 
ance  in  such  cases: 

An  owner  of  rented  property  loses  the  income  therefrom 

when  it  is  rendered  untenantable  in  whole  or  in  part.  J 

An  owner  occupying  his  own  property  loses  the  value  of  ■ 
such  occupancy  under  the  same  conditions. 

In  either  case,  taxes,  interest  on  mortgage,  and  frequently 

348  I 


RENT  AND  LEASEHOLD  349 

maintenance  .  and  operating  charges,  continue  undiminished 
without  any  compensating  "return. 

To  the  individual  owner  rent  insurance  is  sold  as  a  straight 
business  proposition  against  the  risk  of  loss  of  income.  To 
those  having  mortgages  on  their  property,  particularly  build- 
ing and  loan  mortgages,  who  rely  on  their  rental  income  to 
meet  monthly  payments,  it  is  especially  desirable. 

Executors,  trustees,  receivers,  officers  of  corporations  and 
others  responsible  in  a  fiduciary  capacity  consider  this  kind 
of  insurance  in  the  light  of  a  fulfilment  of  their  obligations 
to  protect  the  interests  in  their  care. 

There  is  a  distinction  between  rents  and  rental  value:  In- 
surance against  loss  of  rents  contemplates  payment  only  in 
case  the  building,  or  any  part  thereof,  is  rendered  untenant- 
able by  fire  and  actual  loss  of  rent  ensues;  if  portions  are 
untenanted  there  is  no  actual  loss  of  rent  and  therefore  no 
claim. 

Insurance  against  loss  of  rental  value  contemplates  pay- 
ment if  the  building  or  any  part  thereof  is  rendered  untenant- 
al)le  by  fire,  whether  the  building  is  occupied  by  owner  or  by 
tenant,  and  in  some  cases  is  extended  to  cover  it  if  unoc- 
cupied. 

There  are  many  different  forms  in  use  for  writing  this 
class  of  insurance,  some  prescribed  as  to  phraseology  and  the 
clauses  to  be  attached,  but  the  following  will  serve  as  illus- 
trations : 

"RENTS— FORM  *A' 

{Uniform  East) 

1.  "Whether    Rented    or    Vacant — Based    on    Time    to    Rebuild. 

2.  "$. . .  .on  the  rental  value  of  the building  situate 

3.  "The  term  rental  value,  wherever  used  in  this  contract, 
shall  mean  the  determined  rental  less  such  charges  and  ex- 
penses as  do  not  necessarily  continue. 

4.  "It  is  hereby  provided  that  if  said  premises  or  any  part 
thereof,  whether  rented  at  the  time  or  not,  shall  be  rendered 
untenantable  by  fire  or  lightning  occurring  during  the  con- 
tinuance of  this  policy,  this  Company  shall  thereupon  become 
liable  for  the  rental  value  of  such  untenantable  portions.  Loss 
to  be  computed  from  the  date  of  fire  or  damage  by  lightning, 
until  such  time  as  the  building  could,  with  reasonable  diligence 


350  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

and  dispatch,  be  rendered  again  tenantable,  although  the  per- 
iod may  extend  beyond  the  termination  of  this  policy. 
5        "If  the  insured  occupies  any  portion  of  said  building,  a  fair 
rental  value  of  the  portion  so  occupied  shall  be  considered  as 
a  part  of  the  rental  value  insured. 

6.  "In  the  event  of  a  disagreement  as  to  the  time  required  to 
restore  the  premises  to  the  same  tenantable  condition  as  be- 
fore the  fire  or  damage  by  lightning,  or  as  to  the  rental  value 
of  premises  occupied  by  the  insured,  the  same  shall  be  deter- 
mined by  appraisement  or  reference  in  the  manner  provided 
in  the  printed  conditions  of  this  policy. 

7.  "In  consideration  of  the  reduced  rate  at  which  this  policy  is 
written,  it  is  agreed  that  this  Company  shall  not  be  liable, 
under  this  policy,  for  a  greater  proportion  of  any  loss  that 
may  occur  than  the  sum  hereby  insured  bears  to  the  rental 
value  of  the  whole  of  said  premises  for  the  time  that  would, 
with  reasonable  diligence  and  dispatch,  be  required  to  rebuild 
and  restore  the  same  to  a  tenantable  condition,  if  totally 
destroyed.  Total  liability  under  this  policy  for  any  loss  shall 
not  exceed  the  sum  insured  by  this  policy,  nor  this  Company's 
pro  rata  proportion  of  all  insurance  on  rental  value,  whether 
other  insurance  covers  against  loss  caused  by  lightning  or  not. 

8.  "Other    insurance    permitted   without    notice    until    required." 

It  covers,  as  will  be  ngted,  the  rental  value  of  the  building, 
which  it  defines  as  'Hhe  determined  rental  less  such  charges 
and  expenses  as  do  not  necessarily  continue. '^  Rental  value 
may  be  further  defined  as  the  going  rental  for  similar 
premises  in  a  similar  neighborhood  suitable  for  a  similar 
occupancy.  It  provides  for  computation  of  the  loss  during 
the  estimated  time  it  would  take  to  repair  or  replace  the 
building  and  make  it  tenantable,  and  contains  a  further 
provision  that  the  Company  shall  not  be  liable  for  a  greater 
proportion  of  such  loss  than  the  insurance  bears  to  the  rental 
value  of  the  whole  of  the  premises,  for  the  time  required 
to  rebuild. 

When  determining  how  much  insurance  should  be  carried 
under  this  form,  the  agent  or  owner  should  consider  the  time 
it  is  likely  to  take  to  rebuild  the  building  under  the  most 
unfavorable  circumstances,  that  is,  with  due  allowance  for 
bad  weather,  possible  unsettled  conditions  in  the  building 
trades,  etc. 


RENT   AND   LEASEHOLD  351 

The  following  is  known  as  Form  "J5",  in  which  paragraphs 
2,  3,  5,  6  and  8  are  identical  with  Form  '*A".  The  changes 
in  the  form  are  in  paragraphs  1,  4  and  7,  which  in  Form  "B" 
read  as  follows: 

"RENTS— FORM  'B' 

( Uniform  East) 
1.  "Occupied   or  Rented   Portions   Only — 

Based  on  Time  to  Rebuild. 
4.  "It  is  hereby  provided  that  if  said  premises  or  any  part 
thereof,  occupied  or  rented  at  the  time,  shall  be  rendered 
untenantable  by  fire  or  lightning  occurring  during  the  con- 
tinuance of  this  policy,  this  Company  shall  thereupon  become 
liable  for  the  rental  value  of  such  untenantable  portions.  Loss 
to  be  computed  from  the  date  of  fire  or  damage  by  lightning, 
until  such  time  as  the  occupied  or  rented  portions  of  the 
building  could,  with  reasonable  diligence  and  dispatch,  be 
rendered  again  tenantable,  although  the  period  may  extend 
beyond  the  termination  of  this  policy. 

7.  "In  consideration  of  the  reduced  rate  at  which  this  policy 
is  written,  it  is  agreed  that  this  Company  shall  not  be  liable, 
under  this  policy,  for  a  greater  proportion  of  any  loss  that 
may  occur  than  the  sum  hereby  insured  bears  to  the  rental 
value  of  the  whole  of  the  occupied  or  rented  portions  of  said 
premises  for  the  time  that  would,  with  reasonable  diligence 
and  dispatch,  be  required  to  rebuild  and  restore  the  same  to 
a  tenantable  condition,  if  totally  destroyed.  Total  liability 
under  this  policy  for  any  loss  shall  not  exceed  the  sum  insured 
by  this  policy,  nor  this  Company's  pro  rata  proportion  of  all 
insurance  on  rental  value,  whether  other  insurance  covers 
against  loss  caused  by  lightning  or  not." 

This  is  subject  to  the  same  general  explanation,  and  is 
applicable  under  like  circumstances,  except  that  it  relates 
only  to  the  occupied  or  rented  portions  of  the  building,  that 
is,  if  a  fire  occurs  while  part  of  the  building  is  not  rented  or 
is  unoccupied,  that  part  of  the  building  is  not  taken  into 
consideration  in  computing  the  loss  or  the  rental  value  of 
the  whole  of  the  premises. 


The  following  -is  known  as  Form  "0",  in  which  paragraphs 
2,  3,  4,  5,  6  and  8  are  identical  with  Form  "A".  The  changes 
in  the  form  are  in  paragraphs  1  and  7,  which  in  Form  "C" 
read  as  follows: 


35^  THE  AGENTS   KEY  TO  FIRE   INSURANCE 

"RENTS— FORM   *C' 

{Uniform  East) 
1.  "Whether  Rented  or  Vacant — 

Based  on  Annual  Rental  Value. 
7.  "In  consideration  of  the  reduced  rate  at  which  this  policy 
is  written,  it  is  agreed  that  this  Company  shall  not  be  liable, 
under  this  policy,  for  a  greater  proportion  of  any  loss  that 
may  occur  than  the  sum  hereby  insured  bears  to  the  rental 
value  of  the  whole  of  said  premises  per  annum.  Total  liability 
under  this  policy  for  any  loss  shall  not  exceed  the  sum  insured 
by  this  policy,  nor  this  Company's  pro  rata  proportion  of  all 
insurance  on  rental  value,  whether  other  insurance  covers 
against  loss  caused  by  lightning  or  not." 

This  relates  to  rented  or  vacant  premises,  and  is  based 
on  the  actual  rental  value  for  the  entire  year.  In  writing 
insurance  under  this  fonn,  an  amount  equal  to  the  annual 
rental  value  should  be  carried,  and  it  should  apply  to  all 
premises,  whether  rented  or  not. 


The  following  is  known  as  Form  "D",  in  which  .paragraphs 
2,  3,  5,  6  and  8  are  identical  with  Form  "A".  The  changes 
in  the  form  are  in  paragraphs  1,  4  and  7,  which  in  Form  "D" 
read  as  follows: 

"RENTS— FORM  'D* 

{Uniform  East) 
1.  "On  Occupied  or  Rented  Portions  Only — 

Based  on  Annual  Rental  Value. 
4.  "It  is  hereby  provided  that  if  said  premises  or  any  part 
thereof,  occupied  or  rented  at  the  time,  shall  be  rendered 
untenantable  by  fire  or  lightning  occurring  during  the  con- 
tinuance of  this  policy,  this  Company  shall  thereupon  become 
liable  for  the  rental  value  of  such  untenantable  portions.  Loss 
to  be  computed  from  the  date  of  fire  or  damage  by  lightning, 
until  such  time  as  the  occupied  or  rented  portions  of  the  build- 
ing could,  with  reasonable  diligence  and  dispatch,  be  rendered 
again  tenantable,  although  the  period  may  extend  beyond  the 
termination  of  this  policy. 
7.  "In  consideration  of  the  reduced  rate  at  which  this  policy 
is  written,  it  is  agreed  that  this  Company  shall  not  be  liable, 
under  this  policy,  for  a  greater  proportion  of  any  loss  that 
may  occur  than  the  sum  hereby  insured  bears  to  the  rental 
value  of  the  whole  of  the  occupied  or  rented  portions  of  said 
premises  per  annum.  Total  liability  under  this  policy  for  any 
loss  shall  not  exceed  the  sum  insured  by  this  policy,  nor  this 


RENT   AND    LEASEHOLD  353 

Company's  pro  rata  proportion  of  all  insurance  on  rental 
value,  whether  other  insurance  covers  against  loss  caused  by 
lightning  or  not," 

This  bears  the  same  relation  to  Form  ' '  C  "  that  * '  B  "  does 
to  **A^',  that  is,  it  applies  to  occupied  or  rented  portions 
only,  and  otherwise  is  similar  to  '^C". 


The  following  is  known  as  Form  "£",  in  which  paragraphs 
3,  4,  5,  6  and  8  are  identical  with  Form  "A".  The  changes 
in  the  form  are  in  paragraphs  1,  2,  7  and  7a,  which  in  Form 
*'E"  read  as  follows: 

1.  "RENTS— FORM  'E' 

{Uniform  East) 
FOR   SEASON    RISKS 

2.  "$.... on  the  rental  value  of  the roof  building  occu- 
pied for situate 

7.  "In  consideration  of  the  reduced  rate  at  which  this  policy  is 
written,  it  is  agreed  that  this  Company  shall  not  be  liable, 
under  this  policy,  for  a  greater  proportion  of  any  loss  that 
may  occur  than  the  sum  hereby  insured  bears  to  the  rental 
value  of  the  whole  of  said  premises  during  the  period  for 
which  liability  is  assumed  under  the  succeeding  paragraph. 
Total  liability  under  this  policy  for  any  loss  shall  not  exceed 
the  sum  insured  by  this  policy,  nor  this  Company's  pro  rata 
proportion  of  all  insurance  on  rental  value,  whether  other 
insurance  covers  against  loss  caused  by  lightning  or  not. 

7a.      "Liability  under  this  policy  is  limited  to  loss  of  rental  value 

sustained,  not  exceeding  the  rate  of  $ per  month,  from 

to in  each  year,  inclusive,  and  this  Company  is  hereby 

relieved  from  all  liability  for  loss  of  rental  value  during  the 

remainder    of    the    year,    i.    e.,    from to in    each 

year,  inclusive." 

NOTE: — The  general  outlines  are  the  same  as  the  other 
forms,  except  that  the  liability  is  limited  to  the  rental  value 
for  certain  months  in  the  year,  and  in  the  computation  of  the 
loss  and  of  the  rental  value  only  those  months  are  taken 
into  consideration. 

In  the  Southern  States  the  forms  used  are  different  from 
the  foregoing  in  the  language  used,  but  are  essentially  the 
same  in  their  meaning.  One  of  them  is  given  herewith  as  an 
illustration. 


354  THE  AGENTS   KEY  TO   FIRE   INSURANCE 

RENTS   FORM 

{S.  E.  U.  A.) 
(Based   on   Annual    Rental) 

$....On    the     rents     of    the story building,    with 

roof,    situated    No on    the side    of 

Street,  Block  No ,  in 

This  insurance  is  effected  subject  to  the  following  conditions, 
which  are  hereby  made  warranties  by  the  assured,  and  are 
accepted  as  parts  of  this  contract: 

The  intention  of  this  insurance  is  to  make  good  the  loss  of 
rents  caused  by  fire  or  lightning  actually  sustained  by  the  assured 
on  occupied  or  rented  portions  of  the  premises  which  have  become 
untenantable  for  and  during  such  time  as  may  be  necessary  to 
restore  the  premises  to  the  same  tenantable  condition  as  before  the 
fire. 

If  the  assured  occupies  any  portion  of  the  premises,  a  fair 
rental  value  for  the  portions  so  occupied  shall  be  considered 
as  a  part  of  the  rents  insured.  Said  time,  in  case  of  disagree- 
ment, to  be  determined  by  appraisement  in  the  manner  provided 
in  the  conditions  of  this  policy;  but  this  Company  shall  not  be 
liable  for  a  greater  proportion  of  any  loss  than  the  sum  hereby 
insured  bears  to  the  actual  annual  rental  of  such  occupied  or 
rented   portions   of  the   premises. 

Standard  Time  Clause. — It  is  understood  and  agreed  that 
the  word  "noon"  as  used  herein,  in  designating  the  beginning 
and  ending  of  the  term  of  insurance,  refers  to  Standard  Time 
at  the  place  where  the  property  is  located. 

In  the  Central  and  Western  States  the  forms  for  writing 
rent  and  rental  value  insurance  are  also  different  from  those 
first  quoted,  but  have  essentially  the  same  meaning.  The 
fraction  inserted  in  blank  space  is  either  l/9th  or  l/12th 
except  on  fireproof  buildings  for  which  there  are  special 
•  rules. 

RENT  OR  RENTAL  VALUE  FORM  NO.  1 

(Fire  and  Lightning  Only  with  Limit  of  Losses  per  Month) 
{Uniformity  West) 

$ On  the  rents  of  the story roof build- 
ing, occupied  as situated 

In  case  the  above  named  building,  or  any  part  thereof,  shall 
be  rendered  untenantable  by  fire,  this  Company  shall  be  liable 
to    the    assured   for   the    actual    loss    of   rents,    ensuing  therefrom, 

not   exceeding   the   sum   insured,   nor    one- of   that   amount 

for   any  one  month,  based  upon   bona  fide  leases   in  force   at  the 
time    of    the    fire,    loss    to    be    computed    from    the    date    of    the 


RENT   AND   LEASEHOLD  355 

occurrence  of  said  fire,  and  to  be  determined  by  the  time  it 
would  require,  under  ordinary  circumstances,  to  put  the  premises 
in  tenantable  condition;  and  in  case  any  portion  of  the  building, 
herein  described,  shall  be  occupied  by  the  assured,  for  his  own 
use,  this  policy  shall  extend  to  and  cover  the  rental  value  of 
such  portion  so  occupied,  in  the  same  manner  as  if  under  lease 
to  a  tenant. 

In  the  event  of  a  disagreement  as  to  the  time  that  would  be 
required,  under  ordinary  circumstances,  to  restore  the  building 
to  the  same  tenantable  condition  as  before  the  fire,  or  as  to  the 
rental  value  of  any  part  of  said  building  occupied  by  the  assured, 
the  same  shall  be  determined  by  appraisement  in  the  manner 
provided  in  the  printed  conditions  of  this  policy. 

(Attach  usual  clauses.) 

NOTE : — Above  form  to  be  used  for  buildings  occupied  by 
tenants  and  for  the  insured. 


RENT  OR  RENTAL  VALUE  FORM  NO.  2 

(Fire  and  Lightning  Only  with  Limit  of  Loss  per  Month) 

$ On    the    rents    and/or    rental    value    of    the story 

roof building,  occupied  as situated 

Town  of State  of  Nebraska. 

In  case  the  above  named  building,  or  any  part  thereof,  whether 
rented  at  the  time  or  not,  shall  be  rendered  untenantable  by  fire, 
this  company  shall  be  liable  to  the  assured  for  the  rents  and/or 
rental    value   of   such   untenantable   parts,    not   exceeding   the   sum 

insured,  nor  one- of  t|ie  amount  for  any  month;  loss  to  be 

computed  from  the  date  of  the  occurrence  of  said  fire,  and  to  be 
determined  by  the  time  it  would  require,  under  ordinary  circum- 
stances, to  put  the  premises  in  tenantable  condition;  and  in  case 
any  portion  of  the  building,  herein  described,  shall  be  occupied 
by  the  assured,  for  his  own  use,  this  policy  shall  extend  to  and 
cover  the  rental  value  of  such  portion  so  occupied,  in  the  same 
manner  as  if  under  lease  to  a  tenant. 

In  the  event  of  a  disagreement  as  to  the  time  that  would  be 
required,  under  ordinary  circumstances,  to  restore  the  building  to 
the  same  tenantable  condition  as  before  the  fire,  or  as  to  the  rents 
and/or  rental  value  of  the  building  or  any  part  thereof,  the 
same  shall  be  determined  by  appraisement  in  the  manner  provided 
in  the  printed  conditions  of  this  policy. 

(Attach  usual  clauses.) 

NOTE: — Above  form  to  be  used  for  buildings  vacant,  or 
occupied  in  part  by  tenants  and/or  the  insured. 


356  THE  AGENTS   KEY  TO  FIRE  INSURANCE  | 

? 

RENT  OR  RENTAL  VALUE  DWELLING  FORM  i 

{Uniformity  West)  \ 

{Fire  and  Lightning  Only)  \ 

$....0n  the  rents  of  the story roof build-  j 

ing  with foundation   and chimneys   and  flues,  occu-  J 

pied  and  to  be  occupied  only  as  a  dwelling  by  not  more  than \ 

families,  situated \ 

In  case  the  above  named  dwelling  house,  or  any  part  thereof,  i 
shall  be  rendered  untenantable  by  fire,  this  Company  shall  be  ; 
liable  to  the  assured  for  the  actual  loss  of  rents  ensuing  therefrom,  j 
not  exceeding  the  sum  insured,  nor  one-twelfth  (1-12)  of  that  \ 
amount  for  any  one  month,  based  upon  bona  fide  leases  in  force  | 
at  the  time  of  the  fire,  loss  to  be  computed  from  the  date  of  the 
occurrence  of  said  fire,  and  to  be  determined  by  the  time  it  would  \ 
require  to  put  the  premises  in  tenantable  condition. 

But  if  the  building  be  occupied  by  the  owner,  the  amount  stated 
in  this  item  shall  be  taken  to  be  the  actual  annual  rental  value, 
subject  to  proof,  if  required,  by  the  certificate  of  two  competent 
and  disinterested  real  estate  appraisers,  and  in  that  event  it  is 
the  intent  and  purpose  of  this  insurance  to  indemnify  the  Assured 
for  any  loss  which  he  may  sustain,  not  exceeding  the  amount  so 
named,  by  reason  of  said  dwelling  being  destroyed,  or  so  dam- 
aged by  fire  as  to  render  it  uninhabitable,  thereby  necessitating 
the  renting  of  a  residence  elsewhere. 


Illustrations  of  other  kinds  of  rent  forms  in  use  in  certain 
territories  are  given  herewith. 

OWNER'S   RENT    FORM 

{Season  Property) 
$1,000  on  the  rents  of  the  building  and  furnishings,  situate 

The  above  mentioned  property  having  been  leased  at  a  rental 
which,  for  the  purpose  of  this  insurance,  is  estimated  and  fixed  at 
the  sum  of  $1,000  for  the  term  of  this  policy,  it  is  hereby  under- 
stood and  agreed  that  if  fire,  or  lightning,  occurring  during  the 
term  and  under  the  conditions  of  this  policy,  renders  the  above 
described  property  untenantable,  or  otherwise  invalidates  the  lease, 
this  Company  shall  pay  to  the  insured  the  sum  of  $1,000,  which 
sum,  however,  shall  be  decreased  at  the  rate  of  $200  per  month 

for  such  time  as  may  have  elapsed  from  and  after  June  1st 

to  the  date  of  fire  or  lightning  damage. 

(Attach  usual  clauses.) 

Advanced  Rents.  This  form  of  insurance  is  intended  to  in- 
demnify the  lessee  for  rents  paid  in  advance,  or  to  be  paid  if  his 
lease  is  not  terminated  in  case  of  fire  rendering  the  premises  un- 
tenantable. It  is  chiefly  used  in  the  case  of  a  lease  of  season 
property,  such  as  a  summer  cottage. 


r 


RENT   AND    LEASEHOLD  357 


I 


The  conditions  of  leases  are  so  varied  that  no  one  general  form 
will  serve  in  all  cases,  but  the  following  is  given  for  illustration: 

LESSEE'S  RENT  FORM 

{Entire  Rental  Paid  In  Advance) 
$1,000  on  rents  paid  in  advance  for  the  dwelling  ("and  furnish- 
ings" if  included),  situate It  is  understood  and   agreed 

that  if  fire,  or  lightning,  occurring  during  the  term  and  under  the 
conditions  of  this  policy,  renders  the  above  described  property  un- 
tenantable, this  Company  shall  be  liable  to  the  insured  for  such 
rents,  actually  paid  in  advance,  at  the  rate  of  $200  per  month  dur- 
ing such  time  from  June  1st  to  September  30th,  inclusive,  as  the 
property  is  untenantable  by  reason  of  such  damage  by  fire  or  light- 
ning. 

Note: — Policies  are  usually  written  from  the  date  when  rents 
are  advanced  to  the  date  when  lease  terminates,  as  from  March 
1st  to  October  1st. 

LESSEE'S  RENT  FORM 
No.  2. 
$1,000  on  rent  paid  by  the  insured  in  advance,  or  to  be  paid,  as 

lessee  of  the  dwelling  and  furnishings,  situate If,  during  the 

term  of  this  policy,  the  building  or  furnishings  herein  referred  to 
shall  be  so  damaged  or  destroyed  by  fire  or  lightning  as  to  be- 
come untenantable,  this  Company  shall  be  liable  from  the  date  of 
the  policy  to  June  1st,  1917,  for  the  sum  of  $1,000;  from  June  1st, 
1917,  to  July  1st,  1917,  for  $800;  from  July  1st,  1917,  to  Aug.  1st, 
1917,  for  $600;  from  August  1st,  1917,  to  Sept.  1st,  1917,  for  $400; 
and  from  Sept.  1st,  1917,  to  Oct.  1st,  1917,  for  $200,  It  being  the 
intent  of  this  insurance  to  indemnify  the  insured  at  the  rate,  to 
the  extent,  and  in  the  manner  above  provided,  for  that  portion  of 
the  rental  of  $1,000  paid  in  advance  by  him,  which  would  be  ap- 
plicable to  the  period  as  above  limited  during  which  the  insured 
remains  actually  prevented  from  the  use  of  the  property  described 
for  his  occupancy  as  intended. 

Ground  Rent  Insurance.  This  is  a  form  of  insurance  for  the 
protection  of  the  owner  of  land  under  lease  against  loss  of  ground 
rents,  or  impairment  of  the  security  therefor,  by  reason  of  fire 
damaging  or  destroying  the  building  standing  on  such  land.  In- 
surance is  issued  to  the  owner  of  land  for  an  amount  equal  to  the 
estimated  value  of  ground  rents,  based  on  the  annual  income 
derived  therefrom. 

If  fire  damages  or  destroys  the  building  and  the  lessee  (owner 
of  building)  repairs  or  restores  it,  there  is  no  loss  under  the 
ground  rent  insurance  unless  the  terms  of  the  lease  provide  for 
no  payment  of  ground  rent  during  the  time  necessary  for  repair 
or  replacement. 

If  lessee  does  not   repair  or   restore  building  the   insurance   on 


368                 THE  AGENTS   KEY  TO  FIRE  INSURANCE  | 

i 

ground  rents  pays  the  owner  thereof  the  estimated  value  of  ground  i 

rents  as  stated  in  the  policy  together  with  any  ground  rent  accrued  ij 

and  not  paid  by  lessee,  and  thereupon  the  insurance  company  takes  ■ 

ownership  of  the  land;  or,  as  an  alternative,  it  pays  the  difference,  ; 
if  any,  between  such  estimated  value   and  the   ascertained  value 

at  the  time  of  fire,  the  owner  in  that  case  retaining  the  land.  \ 

The  form  customarily  used  for  writing  such  insurance  reads  as  \ 

follows :  \ 

GROUND  RENT  FORM  | 

$1,363.64  on   annual   ground   rent  of  $75,  issuing  out  of  lot  of  i 

ground about  38  foot  front  by  about  105  foot  deep  and  im-  ' 

proved    by    frame    building    situate Agreed    value    of  « 

ground  rent  $1,363.64.  *. 

It  being  understood  and  it  is  hereby  agreed  that  if  the  security  ' 

for  the  payment  of  the  ground  rents  or   annuities  hereby  insured  ' 

or  any  of  them  shall  be  impaired  or  diminished  by  reason  of  the  ' 
damage    or    destruction   by   fire    of   the    buildings    erected    on    the 

above  mentioned  lots  or  any  of  them,  and  the  owner  of  the  lease-  '■ 
hold  estate  therein  shall  fail  to  repair  or  rebuild  the  same  within 
six  months   from   the   happening   of   the   fire,   this   Company   shall 

pay  to  the   insured   or legal    representatives,  within   thirty  ; 

days  after  demand,  the  sum  or  sums  hereby  insured  on  the  ground  1 

rents  issuing  out  of  such  lots  together  with  the  ground  rent  ac-  j 

crued  to  date  of  said  payment,  not  exceeding  one  year.     This  Com-  ] 

pany  shall   have   the   right,   however,   if  it  shall    so   elect,   to   pay  ' 

unto   the   insured   or   its    legal    representatives   the   value    of   such  . 
ground  rents  as  agreed  upon  above  together  with  the  ground  rent 

accrued  to  date  of  payment,  not  exceeding  one  year,  and  on  such  ; 

payment  the  insured  or legal   representatives  shall  convey  j 

to  the  Company  such  lot  or  lots  of  ground  and  the  ground  rents  ) 

incident   thereto,    clear    of    all    encumbrances,    save    the    leasehold  1 

estate  therein  and  the  unpaid  taxes  thereon.     Reserving,  however,  - 

to  the  insured  the  right  to  receive  and  collect  and  by  legal  process  \ 

to  recover  for own  use  all  arrears  of  ground  rent  in  excess  j 

of  one  year.  \ 

It  is  understood  that  this  insurance  shall  not  be  affected  or  in- 
validated by  any  act  or  neglect  of  the  owner  or  occupant  of  the  ^ 
above-mentioned  buildings,  nor  by  any  foreclosure  or  other  proceed-  >. 
ings  or  notice  of  sale  relating  thereto,  nor  by  occupation  of  the 
premises  for  purposes  more  hazardous  than  are  permitted  by  this  ] 
policy,  nor  by  the  violation  of  any  of  the  terms  or  conditions  of  , 
this  policy  not  affecting  the  fee  simple  interest.  j 

Lightning  Clause  attached.  % 

Another  form  in  use,  giving  a  somewhat  narrower  cover,  reads  ] 
as  follows: 

GROUND  RENT  FORM   (No.  2)  | 

It  is   hereby   understood    and    agreed   that   in   the   event   of   the  1 

above  described  property  being  destroyed  or  impaired  by  reason  of  \ 


RENT    AND    LEASEHOLD  359 

fire,  and  that  the  leasehold  interest  should  fail  to  rebuild  or  repair 
said  improvements  within  a  reasonable  time,  beginning  not  later 
than   six  months   from   the  happening  of  said   fire,   this   Company 

shall,  on  demand,  pay  to  the  assured heirs  or  assigns,  a  sum 

of  good  and  lawful  money  of  the  United  States,  equal  to  the  dif- 
ference between  the  present  value  of  said  lot,  recognized  as  being 

$ and  the  sum  which  may  be  realized  by  the  immediate  sale  of 

said  lot,  not  exceeding  the  amount  insured  by  this  policy.  The  sale 
to  be  conducted  by  a  representative  of  this  Company. 

It  is  understood  that  the  interest  of  the  assured  in  said  property 
is  a  reversion  in  fee,  subject  to  a  leasehold  interest  under  an  in- 
denture of  lease  for  the  renewable  term  of years.  It  is  un- 
derstood that  the  violation  of  any  of  the  terms  or  conditions  of  this 
policy,  not  effecting  the  fee-simple  interest,  shall  not  be  deemed 
to  contravene  or  affect  this  policy. 


The  following  form  is  chiefly  intended  to  protect  the 
owner  or  occupant  of  a  dwelling  house  or  apartment  against 
loss  due  to  the  expense  of  moving  when  fire  renders  premises 
untenantable;  also  the  increase  of  cost  of  temporary- 
quarters  : 

ADDITIONAL   COST   INDEMNITY 

$...  .applying  on  premises  occupied  by  the  insured  either  as 
owner  or  tenant  for purposes  and  situate 

If,  during  the  term  of  this  insurance,  the  building  at  the  above 
location  is  destroyed  or  so  damaged  by  fire  and/or  lightning 
that  the  premises  occupied  by  the  insured  are  rendered  untenantable 
and  the  insured  occupies  other  premises  for  similar  purposes, 
this  Company  shall  be  liable  for  the  ACTUAL  LOSS  THEREBY 
SUSTAINED,  not  exceeding: 

First:  The  actual  cost  of  necessary  removal  of  property  from 
the  above  named  premises,  and  of  moving  it  back  again  if  said 
premises  are  re-occupied  by  the  insured;  not,  however,  exceeding 
10%  of  the  amount  of  this  policy  for  either  removal. 

Second:  The  cost  of  other  suitable  premises  during  the  time 
which  would  be  required  with  reasonable  diligence  and  dispatch, 
to  restore  the  above  named  premises  to  a  tenantable  condition, 
or,  if  lease  thereof  is  cancelled  by  reason  of  such  fire  or  lightning, 
then  during  the  unexpired  term  of  said  lease,  less  in  either  case 
any  abatement  of  rental  for  the  above  named  premises.  Liability 
for  any  calendar  day  shall  not  exceed  l/365th  of  the  remainder 
of  this  policy  after  deducting  the  amount  of  claim  allowed  for 
moving  expenses,  but  shall  not  be  limited  by  the  expiration  date 
of  this  policy. 


360  THE  AGENTS   KEY  TO  FIRE  INSURANCE 


LEASEHOLD  INSURANCE 

Leasehold  Insurance. — There  are  various  kinds  of  interests  in 
leasehold  which  may  properly  be  the  subjects  of  insurance. 
Generally  speaking,  a  lessee  has  an  insurable  interest  in  lease- 
hold if  fire,  by  terminating  his  lease  will  cause  him  a  direct 
financial  loss. 

The  most  common  forms  of  leasehold  insurance  are: 

First: — Where  a  lease  that  iire  under  certain  conditions  will 
terminate  has  been  made  for  a  term  of  years,  and,  rentals  in  the 
neighborhood  having  risen  so  that  a  higher  rental  would  have  to 
be  paid  for  another  suitable  location,  the  lessee  desires  to  protect 
himself  from  the  loss  that  would  ensue  from  a  termination  of  said 
lease.  The  cancellation  of  such  a  lease  by  fire  spells  loss  to  the 
lessee  amounting  to  the  difference  between  his  rental  for  the 
balance  of  the  lease  and  the  going  rental  for  similar  premises  in  a 
neighborhood  suitable  for  his  particular  business.  The  latter  may 
be  determined  by  consultation  with  reliable  real  estate  dealers 
familiar  with  conditions.  The  policy  (annual  or  term)  should 
be  written  for  the  whole  amount  of  such  difference,  subject  to 
deductions  as  indicated  in  the  example  appearing  under  the 
caption  "Explanation  of  Leasehold  form."  What  is  insured  here  is 
really  the  profit  in  the  lease  due  to  its  enhanced  value  from 
whatever  cause.  The  interest  is  quite  as  real,  though  not  always 
so  apparent,  as  in  the  case  of  premises  sublet  at  a  profit.  Never- 
theless, every  lessee  who  is  enjoying  a  favorable  lease  must 
realize  that  fact  and  it  should  not  prove  difficult  to  sell  him 
insurance  to  protect  such  profit  against  the  loss  that  cancellation 
of  his  lease  by  fire  would  entail. 

Second: — Where  a  leasehold  has  been  purchased  for  a  lump 
sum,  and  the  purchaser  desires  to  obtain  insurance  against  the 
loss  of  his  investment  by  reason  of  fire  terminating  his  lease,  or 
loss  of  a  portion  of  his  investment  by  fire  interrupting  his  use 
of  the  premises. 

In  cases  where  a  bonus  has  been  paid  for  a  lease  and  there 
is  a  profit  to  be  insured  as  well,  the  sum  of  the  bonus  and  net 
profit  will  be  the  amount  of  leasehold  insurance. 

For  example:  A  purchases  from  B  for  $2,400  a  lease  having 
two  years  to  run;  A  subleases  at  a  net  profit  (disregarding  bonus) 
of  $3,600  per  annum;  the  insurance  should  be  for  $9,600,  diminish- 
ing at  the  rate  of  $400  per  month. 

Third: — Where  a  lease,  which  fire  under  certain  conditions  will 
terminate,  has  been  executed  for  a  term  of  years,  or  perhaps  for 
only  one  year,  and  the  property  has  been  sub-let  in  whole  or  in 
part  at  a  higher  rental.  Here  the  profit  is  apparent,  being  the 
difference  between  his  rental  and  the  rental  received  from  his 
sublease.  The  policy  (annual  or  term)  should  be  written  for 
the  whole  amount  of  such  difference  unless  there  is  some  expense 


RENT   AND   LEASEHOLD  361 

of  maintenance,  such  as  a  janitor  or  heat,  to  be  deducted  in  order 
to  arrive  at  the  actual  profit  involved.  This  amount,  when  deter- 
mined, is  also  subject  to  the  further  deduction  indicated  in  the 
later  example.  No  such  lessee  should  be  without  insurance  pro- 
tection, for  his  profit  is  right  there  before  him,  yet  subject  to 
loss  if  fire  cancels  his  lease.  If  the  sub-lease  did  not  cover  the 
entire  period  of  the  original  lease,  the  insurance  might,  never- 
theless, be  for  the  amount  of  difference  for  the  entire  period  at 
the  same  ratio  as  the  foregoing. 

Fourth:  Where  a  lessee  is  obligated  to  payment  of  rent  even 
though  the  premises   are   rendered  untenantable  by  fire. 

Such  cases  are  comparatively  rare  and  usually  require  a  special 
form  to  cover   the   particular  conditions   involved. 

f      The  following  forms  are  in  use  where  permitted  by  local  rules. 

r.  In   some   territories   forms    are   mandatory    and   no   others   can   be 
used.     In  such  cases  other  forms  will  serve  only  as  illustrations. 

LEASEHOLD  INTEREST  FORM  NO.  1 

$....on  leasehold  interest  (term  of  rent  from  (date  (a))  to 
(date   (b))   in  the building,  situate 

It  is  understood  and  agreed  that,  if  said  building  shall  be 
totally  destroyed  by  fire,  occurring  during  the  term  and  under  the 
conditions  of  this  policy,  this  Company  shall  pay  the  whole  amount 
hereby  insured,  less  a  deduction  of  $....per  month  for  the  time 
that  shall  have  elapsed  between  the  date  of  (date  (a))  and  the 
date  of  occurrence  of  said  fire.  And  in  case  of  such  damage  by 
fire  as  shall,  without  total  destruction,  render  said  building  un- 
tenantable, this  Company  shall  pay  at  the  rate  of  $....per  month, 
to  be  computed  from  the  date  of  such  fire  to  the  date  when,  by  due 
diligence,  the  said  building  could  be  repaired  and  rendered  fit 
for  occupancy;  but  in  no  case  shall  this  Company  be  liable  for  a 
greater  amount  than  the  sum  insured,  nor  for  any  loss  other  than 
that  which  may  arise  under  said  leasehold  interest. 

(Attach  Lightning  Clause,  and  other  necessary  clauses.) 

LEASEHOLD  FORM  NO.  2 

{Excess  Rental) 
$ On    his    leasehold   interest   in   the building,    situate 


It  is  the  intention  of  this  insurance  to  indemnify  the  insured 
against  loss  of  revenue  from  rents  received  in  excess  of  the  amount 
to  be  paid  by  him  under  a  certain  lease  dated  (date)  for  the  term 
of  twenty  years,  at  the  annual   rental  of  $ 

It  is  understood  and  agreed  that  if  fire,  occurring  during  thft 
term  and  under  the  conditions  of  this  policy,  totally  destroys  the 
above  described  building,  or  a  sufficient  part  thereof  to  terminate 
the  aforesaid  lease  under  its  terms,  this  Company  shall  be  liable 
for  the  whole   amount  of  this  policy,  which  sum,  however,   shall 


362  THE  AGENTS  KEY  TO  FIRE  INSURANCE 


be  decreased  at  the  rate  of  $..,.per  month  for  such  time  as  may 
have  elapsed  from  the  inception  of  the  policy  to  the  date  of  the 
fire- 
In  case  of  fire  partially  destroying  the  building,  rendering  it 
untenantable  in  whole  or  in  part  but  not  terminating  the  said 
lease,  this  company  shall  be  liable  to  the  insured  for  loss  of  excess 
rentals  during  the  time  necessary  to  restore  the  premises  to  a  ten- 

antable  condition,  in  such  proportion   of  $ per  month  as  the  ^ 

excess  rental  of  the  untenantable  portions  bears  to  the  excess  * 
rental  of  the  entire  building,  both  to  be  computed  on  an  annual  | 
basis.  I 

In  the  event  of  dispute  as  to  the  time  required  for  restoring  the  >j 
said  premises  to  a  tenantable  condition,  such  time  shall  be  deter-  ^ 
mined  by  appraisal  in  accordance  with  the  conditions  of  the  policy.  I 
Note: — Policy   should   be  written   for   the   amount  of  the   excess  J 
rentals  for  the  entire  unexpired  period  of  the  leasehold.  \ 


LESSEE'S  RENT  FORM  NO.  3 


f 


(Portion  of  Premises  Sublet) 

$ On  his  interest  as  lessee  in  the   rents  of  the  grade   floor  \ 

store  of  the building,  situate J 

For  the  purpose  of  this  insurance  the  annual  rental  received  by  ' 
the  insured  for  the  sub-lease  of  the  grade  floor  store  is  estimated  ; 
and  fixed  at  the  amount  for  which  this  policy  is  written.  | 

It  is  understood  and  agreed  that  if  fire,  occurring  during  the  ,' 
term  and  under  the  conditions  of  this  policy,  totally  destroys  the  . 
above  described  building,  this  Company  shall  be  liable  to  the  in-  ^: 
sured  for  the  amount  of  this  policy  without  deduction;  and  if  fire  j 
renders  the  grade  floor  store  untenantable,  but  without  destruction  | 
of  the  building  or  a  suflScient  part  thereof  to  terminate  the  in-  i 
sured's  lease  under  its  terms,  this  Company  shall  be  liable  to  the  j 
insured  for  the  actual  loss  of  rent  ensuing  therefrom,  not  exceed-  j 
ing  the  sum  insured,  nor  l/l2th  of  that  amount  for  any  one  j 
month,  or  a  proportionate  amount  if  rendered  partially  untenant-  i 
able;  loss  to  be  computed  from  the  date  of  the  occurrence  of  said  ; 
fire,  and  to  be  determined  by  the  time  required,  with  ordinary  i 
diligence  and  despatch,  to  restore  the  grade  floor  store  to  a  tenant-  J 
able  condition.  | 

In  the  event  of  dispute  as  to  the  time  required  for  restoring  the 
said  premises  to  a  tenantable  condition,  such  time  shall  be  de 
termined  by  appraisal  in  accordance  with  the  conditions  of  the 
policy.  .  \ 

LEASEHOLD  FORM  NO.  4 

On  interest  as  Lessee  of  the  premises  occupied  by  him  in  brick  j 

building  and  additions,  situate as  per  lease  dated ; 

It  is  understood  and  agreed  that  in  case  of  the  cancellation  of  | 

the  assured's  lease  of  above  premises,  under  the  conditions  thereof,  , 


e  ^ 

i 


ll 


RENT   AND   LEASEHOLD  363 

because  or  by  reason  of  fire,  this  Company  is  to  pay  the  amount 
of  this  policy. 

It  is  understood  and  agreed  that  the  lease  may  be  cancelled  by 
the  lessor,  if  the  property  be  substantially  destroyed  by  fire  and 
thereby  rendered  unfit  for  use  and  habitation. 

Also  that  in  case  of  such  loss  or  damage,  because  or  by  reason 
of  fire,  without  resulting  in  the  cancellation  of  said  lease,  which 
renders  the  whole  or  any  portion  of  said  premises  untenantable, 
so  as  to  cause  a  loss  to  the  assured  of  the  benefits  derived  as 
Lessee  of  above  premises,  then  this  Company  shall  be  liable  for 
such  loss  or  damage  during  the  period  of  restoration  or  repair  at 

the  rate  of  $ per  month  for  the  whole  premises,  or  an  equitable 

proportion  for  a  portion  thereof  and  for  the  time  necessary  to  re- 
pair or  restore  the  above  premises  by  using  reasonable  diligence 
and  despatch,  although  the  loss  may  be  in  part  after  this  policy 
shall  have  expired. 

It  is  further  understood  and  agreed  that  this  Company  shall  not 
be  liable  for  any  claim  other  than  loss  under  said  leasehold  in- 
terest. 

(Attach  Lightning  and  other  clauses.) 

LEASEHOLD  FORM 

Note: — The  following  form  was  used  in  a  case  where  a  brewery 
had  purchased  a  leasehold  for  $3,000  and  had  sublet  the  building 
to  a  customer,  who  agreed  to  pay  the  rent  designated  in  the  lease, 
and  also  to  repay  to  the  brewery  the  $3,000  at  the  rate  of  $100 
per  month.  The  brewery's  security  was  the  leasehold,  and  if  lease 
was  terminated  by  fire  it  would  risk  losing  such  portion  of  the 
$3,000  as  remained  unpaid;  hence  the  insurance. 

$ On  their  interest  in  leasehold  of  building,  situate 

It  is  the  intention  of  this  insurance  to  indemnify  the  insured  for 
money  advanced  to  obtain  the  above  leasehold,  in  case  fire  ren- 
ders the  above  premises  untenantable,  and,  in  accordance  with  its 
terms,  the  said  lease  is  for  such  reason  terminated. 

This  policy  shall  decrease  in  amount  at  the  rate  of  $100  for 
each  calendar  month  beginning  with    (date)    until  exhausted. 

(Attach  Lightning  Clause.) 

(Attach  Electric  Light  Clause.) 

(Attach  Mechanics'  Permit.) 

(Attach  Kerosene  Oil  Stove  Permit.) 

LEASEHOLD    FORM 

{S.  E.  U.  A.) 

$....On   this   leasehold   interest    (lease   commencing and 

expiring at   the    rate    of    $ per    month)    in   the 

story.. building,  with roof,  situate  No on  the 

side  of Street,  Block  No ,  in 


364  THE  AGENTS  KEY  TO  FIRE  INSURANCE 


This   insurance   is    effected   subject   to  the   following  conditions,  i 

which  are  hereby  made   warranties  by  the  assured,   and  are  ac-  j 

cepted  as  parts  of  this  contract:  I 

It  is  agreed  that  if  said  building  shall  be  totally  destroyed  by  I 

fire    or    lightning,    this    Company    shall    pay    the    whole    amount  < 

insured   under   this  policy,   less   a  deduction   at  the   rate  of  $ \ 

per    month    for    the    time    that    shall    have    elapsed    between    the  \ 

date  of  this  policy  and  the  date  of  occurrence  of  total  destruction  , 

of  the  building  herein  described.  : 

Provided,   That   in   no   event  shall   this   Company  be   liable   for  1 

more  than  the  amount  for  which  the  assured  shall  be  liable  f 
to  the  owner,  or  original   lessee,  of  this  building,  if  it  is  rebuilt. 

In    case    of    partial    destruction    of    this    building,    which    shall  :■ 

render    same    temporarily    untenantable,    this    Company   shall    pay  \ 

at    the    rate   of   $....per   month    for    the   time    same    shall    be    so  \ 

untenantable,   but   all    reasonable    diligence   shall    be    used   by  the  ' 

parties  in  interest,  other  than  this  Company,  to  repair  the  damage  ; 

and  place  the  building  in  condition  for  occupancy.  i 

In    no   case    shall    this    Company   be    liable    for   more    than   the  \ 

sum  hereby  insured  nor  for  any  loss  other  than  on  said  leasehold  j 

interest.  ■ 

LEASEHOLD   INTEREST   INDEMNITY— 
NON  VALUED 

{S.  E.   U.  A.) 

$ On  the  Insured's  Leasehold  Interest  in  the  building(s)   and 

additions,  situate 

It   is    a    condition   of    this    insurance    that   the   term    "Leasehold  i 

Interest"   as  used  herein  is  defined  as  the  increased  rental  value  \ 

of  the   described  building  to  the   Insured   in   excess  of  the   rental  \ 

paid  by  him    (or  them)    under  a  Lease  date ,  expiring  on  * 

;   and  it  is  warranted  by  the   insured  that  the  following  ? 

is  a  complete  and  correct  copy  of  the  Fire  Clause  in  said  Lease  and  i 
that   no  change   shall   be   made   in   the   said   Fire   Clause   without 
written   notice  to  this   Company. 

(Insert  Copy  of  Fire  Clause  in  Lease.)  i 

If  Lease  contains  no  Fire  Clause  check  here ,  in  which 

event  this  insurance  shall  be  subject  to  the  law  governing  Leases 
of  the  State  in  which  the  described  building(s)   is  situate. 

It  is  a  further  condition  of  this  insurance  that  commencing  with  ^ 

the  date  of  this  policy,  and  extending  throughout  the  term  thereof,  ""x 

the  amount  for  which  this  policy  is  written  shall  be  automatically  | 

reduced  at  the  rate  of  $....per  month.  j 

In    case    the    building(s)    described    herein    be    so    damaged    or  [ 

destroyed  by  fire  or   lightning,  occurring  during  the  term  of  this  i 

policy,    as   to   result  in   cancellation   of   Lease   in    accordance  with  I 

the  Fire  Clause  therein    (or  in  accordance  with  the  State  law  in  | 


RENT   AND    LEASEHOLD  365 

the  absence  of  a  Fire  Clause),  this  Company  shall  be  liable  to 
the  insured  for  the  Actual  Loss  Sustained  to  the  Leasehold  Interest 
insured,  not  exceeding  the  amount  of  this  policy  remaining  in 
force  on  the  date  of  the  fire  as  determined  by  the  special  terms 
and  conditions  of  this  contract. 

In  case  the  building(s)  described  herein  be  so  damaged  or 
destroyed  by  fire  or  lightning,  occurring  during  the  term  of  this 
policy,  as  to  render  the  building(s)  wholly  untenantable  but 
the  Lease  not  being  cancelled  thereby,  this  Company  shall  be 
liable  to  the  insured  for  the  actual  loss  sustained  to  the  Leasehold 
Interest  insured,  at  the  rate  not  exceeding  $....per  month  (or 
if  partially  untenantable  for  a  pro  rata  proportion  thereof),  for 
not  exceeding  such  length  of  time  (not  limited  by  the  date  of 
expiration  of  this  policy)  as  shall  be  required,  with  the  exercise 
of  due  diligence  and  dispatch  by  the  parties  in  interest  other 
than  this  Company,  to  again  render  the  damaged  or  destroyed 
building (s)  fit  for  occupancy. 

In  no  event,  however,  shall  this  Company  be  liable  for  an 
amount  greater  than  the  amount  for  which  this  policy  is  written, 
and  it  is  a  special  condition  of  this  insurance  that  in  the  event 
of  loss  there  shall  be  a  deduction  at  the  legal  annual  rate  of 
interest  from  all  payments  made  more  than  sixty  (60)  days  in 
advance  of  the  dates  upon  which  the  insured  would  have  realized 
such  increased  rental  value  in  the  ordinary  course  of  business 
had  lease  not  been  cancelled. 

In  case  the  insured  and  this  Company  are  unable  to  agree 
as  to  any  questions  affecting  the  amount  of  loss  under  this  policy, 
the  same  shall  be  determined  by  appraisers  in  the  manner  pro- 
vided by  the  policy  to  which  this  form  is  attached,  the  provisions 
of  which  policy  shall  govern  in  all  matters  pertaining  to  this 
insurance. 

In  consideration  of  the  reduced  rate  of  premium  for  which  this 
policy  is  issued,  it  is  agreed  that  in  the  event  of  cancellation 
thereof  the  amount  of  return  premium  due  the  assured  shall  be 
the  difference  between  the  initial  premium  charged  the  assured 
and  the  premium  earned  by  this  Company  computed  on  the  average 
amount  of  this  Company's  liability  during  the  time  policy  shall 
have  been  in  force. 

The  following  Leasehold  Form  is  a  modern  one  which  has 
been  the  subject  of  much  favorable  comment  and  is  believed 
to  be  the  clearest,  best  and  most  equitable  one  yet  devised. 

LEASEHOLD  FORM 

1.  On  the  interest  of  the  insured  as  lessee  of  premises 

under  lease  dated and  expiring 

2.  The  conditions  of  said  lease  relating  to  damage  to  or 
destruction  of  the  buildings  by  fire  are  as  follows: 


366  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

3.  The  term  "interest  of  the  insured  as  lessee"  as  used  herein 
is  defined: 

Where  premises  are  occupied  by  the  insured:  The  difference 
between  the  rental  value  of  such  premises  at  the  time  of  the 
fire  and  the  actual  rental  payable  therefor  during  the  unex- 
pired term  of  the  insured's  lease; 

Where  the  premises  are  sublet:  The  difference  between 
the  total  rent  as  fixed  by  the  subleases  in  force  at  the  time 
of  the  fire  and  the  sum  of  the  (a)  total  rent  payable  by  the 
insured  for  the  premises  sublet  and  (b)  any  maintenance 
and  operating  charges  of  the  insured,  for  the  unexpired  term 
of  the  insured's  lease. 

4.  If  by  fire  occurring  during  the  term  of  this  policy  the 
premises  above  described  are  so  damaged  by  fire  as  to  cause 
the  cancellation  of  the  aforesaid  lease  in  accordance  with  its 
terms  and  conditions  as  entered  above,  this  insurance  shall  be 
liable  for  the  actual  loss  sustained  to  the  "interest  of  the  in- 
sured as  lessee,"  as  above  defined,  pro  rata  with  other  insur- 
ance hereon,  if  any.  Such  loss  shall  not  exceed  the  sum  which 
placed  at  interest  compounded  annually  at  the  rate  of  four  per 
cent  (4%)  per  annum  will  be  the  equivalent  of  the  "interest  of 
the  insured  as  lessee"  for  the  unexpired  term  of  the  lease  as 
such  interest  would  have  accrued  monthly. 

5.  If  said  lease  is  cancelled  in  accordance  with  its  terms,  but  the 
lessee  remains  in  possession — as  tenant  at  will  under  a  new  lease 
or  otherwise — this  Company  shall  be  liable  for  the  actual  loss 
sustained  by  the  insured  to  his  interest  as  lessee,  which  loss  shall 
not  exceed  the  limit  of  liability  as  stated  in  paragraph  4. 

6.  If  by  fire  occurring  during  the  term  of  this  policy  the  above 
described  premises  are  damaged,  which  does  not  cause  a  can- 
cellation of  the  lease  in  accordance  with  its  terms  and  conditions, 
but  does  render  the  premises  untenantable  in  whole  or  in  part, 
this  Company  shall  be  liable  for  its  pro  rata  proportion  of  the 
actual  loss  sustained  by  the  insured  to  his  interest  as  lessee,  at  the 

rate   of   not   exceeding   $ per   month    for   total    untenantability, 

or  a  pro  rata  proportion  thereof  for  partial  untenantability,  for 
and  during  such  time,  but  not  beyond  the  expiration  of  the  lease, 
as  may  be  necessary  with  the  exercise  of  reasonable  diligence  and 
dispatch  to   restore   the   premises. 

7.  The  amount  of  this  policy  is  automatically  reduced  through- 
out its  term  in  the  proportion  that  the  interest  of  the  insured  as 
lessee   decreases. 

8.  This  policy  shall  be  null  and  void  if  the  lease  herein  re- 
ferred to  is  altered  or  modified  in  any  of  its  conditions  that  affect 
the  liability  of  this  Company  under  this  policy,  unless  assented 
to  by  the  Company  in  writing  endorsed  hereon. 

9.  In  consideration  of  the  special  rate  at  which  this  contract  of 
insurance    is    written,    this    policy    shall    not    be    cancelled    by    the 


.4 

I 


RENT   AND   LEASEHOLD  367 

insured  for  the  purpose  of  rewriting  same  for  term  extending 
beyond  the  date  of  expiration  named  in  this  policy,  nor  for  the 
purpose  of  rewriting  same  for  a  smaller  amount  at  any  time 
during  the  life  of  this  policy.  This  provision,  however,  shall 
not  prohibit  the  insured  from  recovering  return  premium  on  a 
short  rate  basis  in  the  event  of  the  termination  of  his  leasehold 
interest  from  any  cause. 

EXPLANATION  OF  FOREGOINa  LEASEHOLD  FORM 

1.  Amount  to  he  insured  to  cover  loss  caused  by  cancel- 
lation of  lease. 

To  cover  loss  caused  by  cancellation  of  lease,  the  amount 
of  the  policy  should  be  the  largest  amount  which  could  be 
collected  under  the  terms  of  paragraph  4. 

To  illustrate  this,  assume  that  insurance  is  wanted  on  lease- 
hold interest  under  a  lease  having  ten  years  to  run  from  the 
date  the  policy  is  issued,  that  the  leasehold  interest  as  we 
have  defined  it  amounts  to  $100  per  month,  and  that  a  fire 
which  cancels  the  lease  occurs  at  12 :01  P.  M.  on  the  date  the 
policy  is  issued.  $100  for  12  months  is  $1,200,  and  for  10 
years,  $12,000,  and  if  the  insured  could  collect  $12,000  at 
once  instead  of  monthly  over  the  ten-year  period,  he  would 
be  materially  overpaid.  For  true  indemnity  he  should  not 
collect  more  than  the  sum  which  at  interest  would  produce 
for  him,  or  be  the  equivalent  of,  the  monthly  leasehold  in- 
terest collected  each  month  during  the  remainder  of  his  lease. 

The  number  of  dollars  shown  opposite  each  year,  if  in- 
vested at  4%  interest  compounded  annually,  will  be  equiva- 
lent to  the  payment  of  $1.00  in  the  middle  of  each  year  for 
the  number  of  years  set  opposite  each  amount.  Thus  $4,541 
paid  at  the  beginning  would  be  the  equivalent  of  paying  $1.00 
on  July  1st  for  each  of  5  years,  which  in  turn  is  practically 
the  equivalent  of  paying  1/12  of  a  dollar  each  month  for  5 
years. 


1  year   $  .981 

2  years 1.924 

3  years 2.8305 

4  years 3.7025 

5  years 4.541 

6  years 5.347 

7  years 6.122 

8  years 6.8675 

9  years 7.584 

10  years 8.273 


11  years $  8.9355 

12  years 9.5725 

13  years 10.1855 

14  years 10.7745 

15  years 11.3405 

16  years 11.885 

17  years 12.409 

18  years 12.9175 

19  years 13.3965 

20  years 13.862 


368  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

Hence  in  the  assumed  example  $8,273  (10  year  equivalent) 
multiplied  by  1200,  makings  $9,927.60,  is  the  amount  of  in- 
surance to  be  carried,  and  this  amount  under  the  form  would 
fully  reimburse  the  insured. 

If  this  term  were,  say,  10  years  and  3  months,  a  result 

sufficiently  close  for  the  purpose  of  determining  the  amount  j 

of   insurance  would  be  reached  by   adding  to  the   amount  5 

shown  above,  three  times  the  '' monthly  leasehold  interest"  \ 

as  entered  in  paragraph  6.    Thus:  i 

Insurance  for  10-year  term $  9,927.60  ! 

Insurance  for  3  months— 3  times  $100 300.00  I 

Amount  of  insurance $10,227.60    ; 

2.  With  relation  to  losses  which  do  not  cause  the  cancella-    i 
tion  of  the  lease.  ] 

In  the  paragraph  of  the  form  relating  to  losses  which  do  I 

not  cause  the  cancellation  of  the  lease,  that  is,  paragraph  6,  ] 

the  monthly  leasehold  interest  should  be  entered  in  the  blank  : 

space  in  this  paragraph.     This  will  provide  for  the  whole  I 

monthly  leasehold  interest,  or  a  pro  rata  proportion  thereof  -^ 

if  the  premises  are  rendered  partially  untenantable,  for  the  ^ 

time  of  such  untenantability.  ) 

3.  Example  illustrating  Paragraphs  1  and  2:  *  % 

Rental  value  of  part  of  building  occupied  by  in-  | 

sured  $  250.00   a 

Rental  obtained  by  insured  from  sub-tenants  for  \ 

remainder  of  building  in  acordance  with  sub-  i 

leases  outstanding   350.00    i| 

AT     .1,1  .  1        :,       ,  1    .  .  $600.00    i 

Montnly  rental  under  lease  between  m-  i 

sured  and  owner  . . . : $400.00 

Monthly    expense    for    heating,    janitor, 

etc 100.00        500.00 

Monthly  leasehold  interest  as  defined  in  policy 

form    $    100.00 

xl2 

Yearly  leasehold  interest  as  defined  in  the  form.   $1,200.00 

xlO 
Leasehold  interest  for  the  remaining  term  of  the 

lease  as  estimated  above — 10  years $12,000.00 


I 


RENT   AND   LEASEHOLD  369 

Present  worth  of  these  1200  payments  due  in 
monthly  installments  extending  over  10  years, 
as  shown  by  application  of  compound  discount 

table $9,927.60, 

which  is  the  amount  of  insurance  to  be  carried  under 
form. 

4.  With  relation  to  the  Reduction  Clause  and  the  Msis  for 
figuring  premium. 

Assume  the  policy  is  written  for  three  years  on  the  lease- 
hold interest  described.  One  year  after  the  issue  of  the 
policy  the  value  of  the  insured's  leasehold  interest  would  be 
$7,584  X  1200,  or  $9,101.80;  two  years  after  it  would  be 
$6,867  X  1200,  or  $8,240.40;  and  at  the  end  of  the  three- 
year  period  it  would  be  $6,122  x  1200,  or  $7,346.40. 

Premium  should  be  figured  on  the  average  amount  at  risk 
at  a  rate  determined  by  the  rules  in  force  in  the  territory 
in  which  the  risk  is  located.  In  the  case  of  the  three-year 
])olicy  above  referred  to,  the  average  amount  at  risk  is 
$8,637.00,  reached  as  follows : 

Amount  of  insured's  leasehold  interest  at  be- 
ginning of  term. , .  $  9,927.60 

Amount  of  same  at  end  of  three-year  term. .  7,346.40 

2)  $17,274.00 

Average    $  8,637.00 

Under  the  usual  forms  the  amount  of  insurance,  the  reduc- 
tion and  the  average  are  figured  as  follows: 

Amount  of  insured 's  leasehold  interest  at  be- 
ginning of  term  $12,000.00 

Amount  at  end  of  three-year  term  (Deduct 

36  X  $100  =  $3600) 8,400.00 

2)  $20,400.00 

Average  for  three-year  term $10,200.00 

If  the  rate  according  to  the  rules  in  force  where  a  risk  is 
located  is  1%,  and  the  term  rule  is  2^/2  times  the  annual  rate, 
then  the  three-year  premium  under  this  form  will  be  $215.92, 
whereas  under  the  usual  forms  it  would  be  $255.00.  It  will 
therefore  be  apparent  that  the  advantage  of  using  this  lease- 
hold form  over  that  commonly  used  lies  in  the  fact  that  full 
actual  indemnity  can  be  secured  at  a  lower  cost. 


DIVISION  XIV  j 

USE  AND  OCCUPANCY,  PROFITS  AND  COM-    1 
MISSIONS  INSURANCE— EXPLANATION 

AND  ILLUSTRATIVE  FORMS  i 

These  three  kinds  of  insurance  are  of  a  kindred  nature  | 

all   being   supplementary  to   the   familiar  property   damage  ! 

insurance;  they  are  written  under  special  forms  attached  to  j 

the   standard  fire,   or  tornado,   or   earthquake,   or   sprinkler  i 

leakage,  or  riot,  civil  commotion  or  explosion  policies,  as  the  \ 

case  may  be.  For  convenience  reference  hereafter  will  be  only  | 
to  losses  as  the  result  of  fire,  but  all  that  is  stated  will  be 

equally   applicable   to   the   other   casualties  mentioned.     As  , 
the  terms  are  commonly  used  these  kinds  of  insurance  may 

be  defined  as  follows:  j 

Use  and  Occupancy  Insurance  is  intended  to  cover  loss  ' 
of  (a)  profits  and  (b)  maintenance  expenses  or  charges,  due  \ 
to  fire  necessitating  a  suspension  of  normal  operations. 

There  are  two  kinds  of  Profit  Insurance : 

First,  that  which  is  included  in  the  use  and  occupancy  ' 

cover — namely,  indemnity  for  loss  of  profits  or  earnings  due  i 

to  fire  causing  a  suspension  of  business  and  consequent  ina-  | 

bility  to  use  premises  for  their  normal  purpose.  ; 

Second,  indemnity  for  loss  of  profits  on  finished  stock,  or 

on  merchandise  held  for  sale,  by  reason  of  its  being  dam-  ! 

aged  or  destroyed  by  fire.    A  use  and  occupancy  policy  does  , 

not  cover  a  loss  of  this  nature.  ] 

Insurance  of  Commissions  is  also  of  two  different  kinds  { 
as  defined  in. the  preceding  paragraph  and  covers  commis-  \ 
sions  in  place  of  profits.  i 

Use  and  Occupancy  Insurance,  sometimes  called  Business  ] 

Interruption  Indemnity,  has   arisen   because  of  the  serious  '< 

losses  which  fire  entails  that  are  not  covered 

Why                  under    the    familiar    form    of    fire    insurance  ■ 

Needed             policy.     The  latter  covers  only  against  direct  • 

loss  or  damage  by  fire  to  the  property  involved,  ■ 

yet  the  ensuing  interruption  of  business  is  often  more  serious  ; 

in   its   effect   than   the   property   loss.     Even   though   every  i 

370 


I 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS    371 

dollar  of  property  damage  is  recovered,  there  still  remains 
to  be  taken  into  account  the  loss  of  profits,  because  goods 
cannot  be  produced,  sold  or  stored,  and  of  expenses  or  fixed 
charges  that  continue  despite  the  interruption  or  suspension 
of  business. 

It  is  essential  for  the  average  business  to  continue  unin- 
terruptedly, for  trade  quickly  drifts  away  from  the  manu- 
facturing concern  that  is  not  producing  goods,  or  the  mercan- 
tile concern  whose  doors  are  closed.  The  manufacturer 
makes  his  money  by  producing  goods  and  selling  them;  if  he 
cannot  manufacture,  it  is  useless  to  sell,  therefore  he  must 
have  the  use  of  his  factory  else  his  business  will  largely  cease 
and  with  it  his  chance  of  profit.  The  wholesale  and  retail 
merchant  makes  his  money  through  being  able  to  display 
goods  and  deliver  them  when  sold.  If  he  has  no  stock  and 
no  place  from  which  to  conduct  business,  or  if  he  cannot 
steadily  supply  his  customers,  then  they  will  quickly  go  to 
other  dealers.  Hotels  are  especially  affected  by  having  to 
close  their  doors  for  a  time. 

Therefore,  fire  interrupting  the  normal  business  of  the 
manufacturer,  merchant,  or  warehouseman,  or  other  in- 
dustry, whereby  the  production,  or  sale,  or  storage  of  goods, 
or  use  of  premises,  is  diminished  or  suspended,  causes  not 
only  the  loss  of  profit  derived  from  operation,  but  also  loss 
through  the  expense  of  standing  charges  which  cannot  be 
escaped  while  the  work  of  restoration  is  going  on. 

It  is  at  this  point  where  the  regular  fire  insurance  drops 
the  burden  of  loss  that  use  and  occupancy  insurance  picks 
it  up  and  carries  such  burden  until  the  prem- 
U.  &  O.  ises  can  be  restored  to  a  productive  condition. 

Cover  thus  enabling  the  insured  to  keep  his  organi- 

zation together  without  financial  drain  and 
also  to  maintain  net  earnings  unimpaired.  The  cover  is  a 
broad  one  including  not  only  net  profits,  but  also  those  items 
of  expense  commonly  referred  to  as  fixed  or  maintenance 
charges  that  cannot  be  escaped  during  a  period  of  forced 
suspension. 

The  items  which  are  usually  considered  in  estimating  the 
value  of  use  and  occupancy  are  as  follows,  all  being  figured 
on  the  basis  of  a  full  year's  time: 


372  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

Net  ])rolits  which  would  or  might  reasonably  have 

been  earned  but  for  a  fire $ . . . .  \ 

Taxes  and  ground  or  other  rent i 

Interest  on  notes  and  bonds 

Salaries  and  directors'  fees \ 

Royalties  for  machinery  or  processes  which   are 

payable  whether  operating  or  not • 

Wages  of  foreman  and  such  skilled  help  as  could 

not  be  laid  off ' 

Salaries  of  salesmen  under  contract : 

Cost  of  non-cancellable  advertising  contracts  and  ; 

that  portion  of  insurance  premiums  which  must  ' 

continue   during   suspension 

Cost  of  lighting,  heating,  watchman,  and  general  ; 

maintenance  consistent  with  a  condition  of  idle-  | 

ness   

Other  fixed  charges,  or  special  items  of  expense  ; 
or    indebtedness,    which    cannot    be    eliminated 

during  a  suspension  of  operations \ 

Total  $.... 

Use  and  Occupancy  Insurance  equal  to  the  sum  of  these  < 

items,  or  in  other  words  equal  to  one  year's  estimated  net  ■ 

profits   and   fixed    expenses,    should   be   main-  j 

Amount            tained  if  complete  protection  is  desired.     If  | 

Necessary        fire  necessitates  a  total  suspension  of  normal  '. 

operations  the  U.  &  0.  policy  pays  any  loss 

sustained  up  to  the  limit  of  l/300th  of  the  amount  insured  : 

for  each  working  calendar  day  of  such  suspension,  or  l/365th  . 

if  business  is  operated  daily  as  in  the  case  of  electric  light  i 

plants,   street   railways,   hotels    and   the   like.     Where    fire  i 

causes    only    partial    interruption    a   proportionate    amount  ] 

is  payable.                                   \  i 

In  order  to  provide  for  those  business  enterprises  where  j 

the    earnings    fluctuate    quite    widely    as    between    different  ! 

periods  of  the  year  forms  have  been  devised  whereby  the  | 

limit  of  liability  per  day  may  fluctuate  for  different  stated  .' 

periods.  j 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS    373 

The  forms  in  use  do  not  as  a  rule  enumerate  the  nature  of 
the   fixed   or  maintenance   charges   that   are   to   be   covered 

under  a  use  and  occupancy  policy  and,  due  to 
Fixed  the   danger  of  some  omission,   it  is   a  better 

Charges  contract    for    the   insured   not   to   have    them 

stated.  In  order,  however,  to  show  the  intent 
of  the  insured  at  the  time  of  taking  out  use  and  occupancy 
insurance,  it  is  considered  a  good  plan  to  keep  on  file  an 
accurate  and  detailed  memorandum  of  the  items  which  have 
been  included,  especially  the  maintenance  charges,  such  mem- 
orandum being  in  the  nature  of  an  inventory. 

There  are  certain  basic  principles  which  are  of  value  in 
considering  use  and  occupancy  insurance,  among  them  the 
following : 

First,    the    unit    of    measure    is    one    year 
Basis  whether  profits  are  earned  continuously  at  a 

Annual  fairly  stable  average  throughout  the  year  or 

Turnover         concentrated   into   shorter   periods    as   in   the 
case  of  canneries  or  summer  hotels.    It  is  the 
annual    turn-over    upon    which    insurance    calculations    are 
based. 

Second,  use  and  occupancy  insurance  deals  with  the  period 
of  time  the  other  side  of  the  fire.     It  is  the  future  not  the 

past  that  is  contemplated.  The  profits  of  a 
A  Contract  past  period  are  of  value  in  determining  the 
for  the  amount  of  insurance  to  be  carried  or  the  loss 

Future  to  be  paid  only  as  the  future  may  be  expected 

to  be  a  reflection  of  the  past.  The  earnings  may 
be  greater  or  they  may  be  less,  and  the  true  spirit  of  such 
insurance  must  take  into  account  all  the  factors  present  at 
the  time  of  the  fire  and  all  of  those  which  reasonably  may 
be  forecast  for  a  period  of  suspension  in  order  to  justify  it 
as  real  indemnity  rather  than  a  business  gamble  or  a  battle 
of  wits  between  the  adjuster  and  the  insured.  It  should  be 
borne  in  mind,  therefore,  that  it  is  a  contract  of  indemnity 
with  certain  stated  limits  for  it  undertakes^  to  pay  for  the 
specified  losses  sustained  due  to  fire  preventing  the  normal 
use  of  premises,  whether  such  loss  is  of  maintenance  charges 
that  can  be  proven  or  of  prospective  profits  that  may  only 
be  arrived  at  in  the  light  of  reason. 

The  foregoing  demonstrates  that  use  and  occupancy  insur- 
ance is  needed  even  though  no  profit  has  been  made,  if  profits 


374  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

jirc   expected  in   the  future,  and  in  any   case  maintenance 
charges  must  be  considered. 

Third.  The  amount  recoverable  for  any  one  day  of  total 
suspension  is  limited  to  l/300th   (or  l/365th)   of  the  total 

amount  of  the  insurance.  This  operates  with 
No  a  somewhat  similar  effect  as  the  coinsurance  or 

Coinsurance     average  clause  which  is  not  made  a  part  of 

use  and  occupancy  contracts.  In  other  words, 
in  order  to  sustain  a  total  loss  under  a  use  and  occupancy 
policy  the  insured  must  have  a  total  suspension  for  a  full 
year  and  the  value  of  the  use  and  occupancy  must  be  at 
least  equal  to  the  total  amount  of  the  insurance  thereon. 
The  insured  is  quite  at  liberty  to  carry  as  much  or  as  little 
insurance  as  he  likes,  but  whatever  such  amount  may  be  he 

can  only  collect  the  stated  proportion  thereof 
Limit  for  each  day.     To  illustrate:    If  the  value  of 

Per  Diem         Use  and  Occupancy  is  $30,000  per  annum  and 

insurance  to  that  amount  is  maintained  under 
the  usual  form,  the  per  diem  payment  will  be  l/300th  or 
$100;  but  if  only  $20,000  insurance  is  maintained,  then,  the 
per  diem  payment  will  be  l/300th  of  such  amount,  or  $66.66. 
One  of  the  reasons  for  not  using  the  coinsurance  clause  on 
use  and  occupancy  policies  is  the  difficulty  of  arriving  at 
the  sound  value,  particularly  in  view  of  the  fact  that  there 
is  nothing  in  the  contract  to  prevent  a  partial  suspension 
running  beyond  the  period  of  one  year.  It  is  technically 
possible,  though  very  unlikely,  that  a  given  machine  affecting 
10%  of  production  might  not  be  replaceable  under  five  years' 
time,  in  which  case  the  partial  suspension  loss  would  be  for 
such  five-year  period.  During  the  war  there  were  several 
large  concerns  using  imported  machinery  which  purchased 
use  and  occupancy  insurance  covering  for  one  and  in  some 
cases  two  years  beyond  the  end  of  the  first  calendar  year, 
or  in  other  words  covering  a  loss  that  might  extend  over 
600  or  900  working  days  instead  of  the  customary  300. 

On  the  other  hand,  the  coinsurance  clause  is  usually  at- 
tached to  policies  covering  profits  or  commissions  (referred 
to  later)  on  merchandise  for  sale,  or  finished  stock,  for  in 
this  form  of  cover  there  is  no  stipulation  for  a  per  diem 
recovery. 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS    375 

For  a  long  time  use  and  occupancy   forms   contained   a 
clause  reading  something  "like  this:     ^^ During  a  partial  sus- 
pension the  per  diem  liability  under  this  policy 
Past  shall  not   exceed  that  proportion  of  the  per 

Record  diem  liability  which  would  have  been  incurred 

by  a  total  suspension,  which  the  decrease  in 
production  bears  to  the  full  daily  production  at  the  time  of 
the  fire,  which  shall  be  based  upon  the  average  daily  pro- 

duction  for days  of  full  operation  next  preceding  the 

fire. '  ^  In  the  forms  recently  adopted  over  a  wide  territory, 
commonly  known  as  the  ''uniform"  forms,  this  condition 
has  been  changed  by  making  the  underlined  paragraph  read 
''due  consideration  being  given  to  the  experience  of  the 
business  before  the  fire  and  the  probable  experience  there- 
after." This  change  was  brought  about  through  recognition 
of  the  fact  that  neither  a  total  nor  a  partial  loss  could  be 
settled  wholly  on  the  basis  of  past  history  nor  wholly  on  a 
decrease  in  quantity  of  production,  whether  expressed  in  units 
of  weight,  measure,  or  dollars  of  value,  and  that  to  base  it 
wholly  upon  past  profits  might  prove  inequitable  because 
these  vary  so  greatly  that  such  a  yardstick  might  work  either 
against  the  insured  or  the  company.  There  must  inevitably  be 
something  left  to  the  judgment  of  the  two  parties  to  the  con- 
tract in  adjusting  a  use  and  occupancy  loss  of  any  magnitude, 
for  it  is  manifestly  impossible  to  forecast  the  future  earnings 
of  any  business  except  as  an  estimate.  For  this  reason  there 
has  been  some  consideration  given  to  the  plan  of  adjusting 
U.  &  0.  losses  after  business  is  resumed,  since  then  all  the 
factors  are  of  more  accurate  and  precise  determination.  The 
chief  objection  urged  against  this  has  been  that  the  insured 
would  then  not  have  the  use  of  the  money  to  pay  fixed 
charges,  dividends,  etc.  It  might  be  possible  to  work  out 
such  a  plan  by  arrangihg  a  tentative  adjustment  and  ad- 
vancing a  part  of  the  loss  payment  on  account,  but  this 
would  be  so  radical  a  departure  from  customary  fire  insurance 
practice  that  the  general  plan  has  not  disclosed  many 
supporters. 

One  of  the  questions  that  arises  not  infrequently  is  this: 
What  shall  be  considered  the  cost  of  raw  materials  where 
use  and  occupancy  is  carried  on  one  factory  out  of  a  num-* 
ber  owned  by  the  same  concern,  the  other  factories  produc- 
ing a  part  or   all  of  such   raw  materials'?     For   example: 


376                 THE  AGENTS   KEY  TO  FIRE  INSURANCE  ! 

j 

Three  factories  are  located  at  different  points  all  owned  by  ] 
the  Universal  Wheel  Company.  Plant  A  saws  and  dries 
wood  ready  for  turning.  Plant  B  turns  spokes,  hubs  and 
rims.  Plant  C  assembles  and  paints  wheels  for  the  trade. 
It  is  the  practice  of  the  concern  to  charge  a  profit  of  20% 
over  costs  at  each  factory  and  these  costs  per  wheel  are  as 
follows : 

Plant  A — Raw  material    $  .80  j 

Labor  and  overhead 40 

Cost $1.20  i 

Profit    .24  I 

Total   $1.44  ; 

I 

Plant  B — Raw  material    1.44  \ 

Freight,  labor  and  overhead 36 

Cost  $1.80  ! 

Profit    .36  j 

Total   $2.16  \ 

Plant  C— Cost  of  Wood  materials 2.16  \ 

Paint  and  Iron  work 14  ; 

Labor  and  overhead .40  | 

Cost  $2.70 

Profit    .54  1 

Selling  Price $3.24  ' 

I 
In  such  case  the  actual  cost  to  the  Universal  Wheel  Com-  ] 
pany  of  the  finished  wheel  is  $2.10  and  the  profit  thereon  is  j 
$1.14,  but  said  profit  is  distributed  among  the  three  plants.  : 
It  would  not  be  feasible  to  take  out  use  and  occupancy  in-  \ 
surance  only  on  plant  C  for  the  entire  amount  of  this  profit,  | 
because  this  would  not  give  protection  if  plant  A  or  B  were  ^ 
destroyed  by  fire.  The  best  way  to  protect  the  insured's  ; 
interest  would  be  to  carry  blanket  use  and  occupancy  insur- 
ance over  all  three  plants  as  this  brings  the  whole  question  <■. 
of  loss  within  the  compass  of  one  contract.  If,  however,  i 
this  is  not  practicable  due  to  their  location,  or  other  reason,  i 
the  next  best  method  would  be  to  maintain  use  and  occu-  j 
pancy  insurance  on  each  plant  separately  and  include  in  the  ^ 
form  the  following  provision:  J 

f 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS    377 

**It  is  understood  and  agreed  that  parts  made  and/or 
furnished  to  this  factory  by  other  plants  of  the  insured 
shall  be  considered  as  costing  this  factory  the  price  at  which 
they  are  billed  to  it  by  such  other  plants." 

Where  Use  and  Occupancy  Insurance  is  written  by  more 
than  one  company  on  the  same  plant,  the  amount  of  each 
company's  policy  and  the  daily  limit  should  be  stated  in  the 
form,  rather  than  to  have  the  form  read  for  the  whole 
amount  of  use  and  occupancy  insurance  carried  and  the 
aggregate  daily  limit.  This  is  true  because  the  ordinary  pro 
rata  clause  is  not  adapted  to  precisely  defining  each  com- 
pany's liability  and  daily  limit.  For  example,  assume 
$300,000  insurance  on  a  300  day  basis,  making  a  daily  limit 
of  $1,000.  Policy  for  $30,000  is  issued  in  company  A  with 
a  pro  rata  clause  reading:  ''This  company  covers  a  pro 
rata  proportion  of  the  following:".  While  it  may  be  clear 
to  insurance  men  that  such  language  is  intended  to  mean  that 
company  A  covers  for  $30,000  with  a  limit  of  $100  a  day, 
it  has  sometimes  been  disputed  whether  the  pro  rata  clause 
applied  both  to  the  amount  of  insurance  and  the  correspond- 
ing limit,  or  wholly  to  the  amount  of  the  insurance. 

Where  Use  and  Occupancy  Insurance  covers  plants  that 
are  in  two  or  more  locations,  it  is  not  necessary  to  attach 
any  distribution  clause,  at  least  under  the  forms  customarily 
in  use. 

In  arriving  at  the  amount  of  net  profits  upon  which  to 
base  the  amount  of  Use  and  Occupancy  Insurance  to  be  car- 
ried computation  should  be  made  as  though  there  were  no 
Federal  Income  Tax. 

Use  and  Occupancy  Insurance  usually  specifies  that  loss  is 
predicated  on  inability  to  use  buildings,  machinery  and 
equipment  and  in  the  case  of  factories,  raw  materials.  It 
is  not  intended  to  cover  profits  on  stocks  of  finished  goods 
because  these  have  gone  through  the  factory  and  can  neither 
be  benefited  nor  harmed,  per  se,  by  loss  of  the  use  of  the 
factory.  If  such  insurance  is  desired,  the  straight  profits 
policy  should  be  carried.    If  manufactured  stock  is  destroyed, 

it  might  be  considered  that  in  order  to  indem- 
About  nify  the  insured  for  loss  caused  by  interrup- 

Finished  tion  of  business  an  allowance  should  be  made 

Stock  for  the  time  necessary  to  manufacture  stock 

with  which   to  replace  any  finished  stock  on 


378  TPIE  AGENTS   KEY  TO  FIRE  INSURANCE 

hand  so  that  the  insured's  business  as  nearly  as  possible 
would  be  put  back  where  it  was  immediately  preceding  the 
fire,  but  it  is  not  the  intent  to  cover  that  particular  feature. 
The  reason  for  this  is  that  the  property  insurance  would 
pay  the  damage  to  stock  including  the  cost  of  manufacture 
up  to  the  date  of  the  fire  and  furthermore  a  certain  portion 
of  the  fixed  charges  or  expenses  is  included  in  the  adjust- 
ment of  the  property  loss  and  if  these  were  paid  for  under 
a  U.  &  0.  policy  during  the  time  of  manufacturing  reserve 
stock,  it  would  be  double  indemnity.  The  forms  now  in  gen- 
eral use  specify  that  there  shall  be  no  loss  during  the  time 
necessary  to  replenish  finished  stock,  although  they  do  pro- 
vide for  indemnity  during  the  time  factory  might  have  been 
operated  with  the  raw  materials  on  hand  at  the  time  of  the 
fire,  if  these  cannot  be  replaced  by  the  time  buildings  and 
machinery  are  restored  to  a  productive  condition. 

In  the  case  of  mercantile  risks  it  is  not  necessary  to  carry 
both  use  and  occupancy  and  profits  insurance  and  usually 
it  is  not  material  whether  the  stock  is  included  within  the 
cover  or  not.  The  property  insurance  will  pay  the  loss  on 
goods  damaged  or  destroyed  and  the  U.  &  0.  insurance  will 
pay  for  the  profits  that  would  have  been  earned  had  not 
fire  interrupted  the  normal  use  of  the  premises.  Therefore, 
if  full  insurance  is  carried,  there  will  be  no  loss  to  the  in- 
sured except  diversion  of  trade  which  is  not  covered  in  any 
case.  If  building,  equipment  and  stock  are  covered,  then 
the  insurance  is  liable  after  restoration  of  the  premises  for 
the  further  length  of  time  it  will  take  to  assemble  and  put 
goods  on  the  shelves,  but  usually  this  is  for  such  a  short 
period  that  the  recovery  would  be  only  a  relatively  small 
amount. 

Use  and  Occupancy  Insurance  is  especially  needed  by 
manufacturers  of  all  classes  of  goods,  particularly  advertised 

brands,  by  large  merchants,  hotels,  laundries. 
Who  motion  picture  and  other  theatres,  warehouse- 

Needs  men  and  public  utilities,  such  as  electric  light 

and  power  plants,  gas  works,  street  railways 
and  telephone  exchanges. 

Use  and  Occupancy  Insurance  may  be  carried  by  the  oc- 
cupant of  the  building  whether  he  is  the  owner  or  the  tenant. 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS    379 

Sometimes    those   other    than   the   owner   or   occupant   of 
factory  may  have  an  interest  which  is  dependent  on  the  un- 
interrupted   production    therein    of    finished 
Outside  goods;  for  example,  the  interests  of  a  sales 

Interests  agent    or    a    commission   merchant,   who    will 

lose  profits  or  commissions  on  the  sale  of 
goods  if  they  cannot  be  delivered  because  of  fire  occurring 
in  the  factory.  When  protection  of  this  kind  is  desired, 
the  insurance  is  written  in  the  name  of  the  sales  agent  or 
commission  merchant,  securing  him  against  loss  of  profits 
or  commissions  due  to  the  inability  of  the  manufacturer,  with 
whom  he  has  a  contract,  to  deliver  goods  because  of  the  hap- 
pening of  a  fire.  Sometimes  such  a  policy  specifies  that  the 
profits  or  commissions  tp  be  recovered  shall  be  a  stated  per- 
centage of  the  amount  of  the  cost  or  selling  price  of  goods 
that  would  normally  have  been  produced  by  the  factory  but 
for  the  fire. 

Another  form  of  indemnity  is  where  John  Doe  has  a  con- 
tract with  Richard  Roe  for  a  certain  amount  of  goods  which 
Doe  must  receive  regularly  in  order  to  carry  on  his  own 
business.  If  Roe  cannot  deliver  them,  Doe  must  go  into  the 
open  market  and  buy  similar  goods.  In  such  case,  the  policy 
to  Doe  agrees  to  indemnify  him  for  the  estimated  difference 
between  contract  price  and  market  price,  in  case  Roe  can- 
not produce  and  deliver  goods  because  of  a  fire  in  his  factory. 

While  Use  and  Occupancy  Insurance  customarily  includes 
both  loss  of  profit  and  loss  of  maintenance  and  expenses 
either  may  be  insured  without  the  other  if  so  desired. 

Where  Use  and  Occupancy  insurance  is  desired  for  a  short 
term,  as  in  the  case  of  a  store  during  November  and  Decem- 
ber to  cover  extra  value  because  of  holiday 
Short  trade,  the  short  rate  table  cannot  properly  be 

Rate  applied  in  the  same  manner  as  in  computing 

the  premium  on  ordinary  fire  insurance.  The 
rule  should  be  to  compute  one  year's  Use  and  Occupancy  in- 
surance at  the  rate  of  per  diem  recovery  stated,  calculate  the 
premium  thereon  and  take  the  short  rate  of  such  annual 
premium  for  whatever  period,  less  than  one  year,  that  the 
policy  is  to  be  written. 

For  example,  assume  that  U.  &  0.  insurance  is  desired  for 
three  months  (75  working  days),  with  a  recovery  of  $100 
for  each  working  day,  the  annual  rate  being  60  cents;  then, 


380  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

300  working  days  X  $100  per  day  =  $30,000  for  one  year, 
and  at  60  cents  the  premium  per  annum  is  $180.  The  short 
rate  for  three  months  is  40%  of  the  annual,  and  the  premium 
for  three  months  will  be  $72;  therefore,  the  policy  in  such 
case  will  be  written  for  $7,500  (75  working  days  at  $100  per 
day),  and  the  premium  will  be  $72. 

If  the  usual  method  were  followed  of  taking  the  short  rate 
of  the  60  cent  annual  rate,  which  would  be  24  cents  for 
three  months,  and  multiplying  this  by  the  $7,500  insurance, 
the  premium  would  be  only  $18;  this  would  manifestly  be 
wrong,  for  on  this  basis  U.  &  0.  insurance  might  be  placed 
quarterly,  and  in  a  year  the  premium  would  be  only  $72  (4 
times  $18),  instead  of  the  correct  annual  premium  of  $180. 

Profits  or  Commissions  Insurance.  Reference  has  been 
made  in  the  foregoing  to  a  straight  profit  policy  on  finished 
goods.  The  familiar  form  of  fire  insurance  policy  covering 
merchandise  undertakes  only  to  pay  the  cost  of  reproduction 
or  replacement  and  therefore  does  not  include  anything 
beyond  a  strict  property  damage.  There  are  conditions  un- 
der which  profits  or  commissions  will  be  lost  and  cannot  be 
regained  if  merchandise  is  destroyed;  such  loss  is  a  proper 
subject  of  insurance.  The  owner  of  goods  may  insure  against 
loss  of  profits  of  goods  that  are  manufactured  and  held  for 
sale  or  that  are  sold  and  awaiting  shipment  and  may  recover 
roughly  the  difference  between  replacement  cost  and  selling 
price.  Commission  merchants  selling  goods  of  others  often 
insure  against  loss  of  profits  or  commissions  on  goods  held 
for  sale  or  goods  sold  but  not  delivered  while  contained  on 
their  own  or  another's  premises. 

Various  forms  are  in  use  and  illustrations  will  be  found 
among  those  printed  hereafter.  Sometimes  such  a  form  stip- 
ulates that  the  recovery  shall  be  a  fixed  percentage  of  the 
selling  price,  or  the  recovery  may  be  the  difference  between 
the  manufacturing  cost  laid  down  in  a  given  warehouse  and 
the  selling  price  less  maximum  discounts,  or  recovery  may 
be  not  to  exceed  some  stated  percentage  of  any  amount  of 
loss  ascertained  or  fixed  under  the  insurance  covering  the 
property  damage  to  the  stock.  Some  of  the  newer  forms 
omit  any  stated  percentage  and  leave  the  matter  wholly  to 
adjustment  in  case  of  loss.  The  theory  of  basing  the  loss 
of  profits  on  the  adjusted  property  loss  is  predicated  on  the 
thought  that  the  owner  should  not  have  opportunity  to  re- 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS    381 

cover  his  profits  on  the  entire  value  of  the  stock  covered 
and  then  make  an  additional  prolit  on  the  sale  of  the  salvage. 
In  theory,  the  same  profit  may  be  made  on  sale  of  the  salv- 
age as  would  have  been  made  on  the  goods  had  no  fire 
occurred. 

The  foregoing  and  many  other  instances  which  might  be 
cited  show  the  wide  field  that  exists  for  the  sale  of  insur- 
ance against  indirect  losses  resulting  from  fire  and  as  previ- 
ously stated  from  other  casualties  which  are  assumed  under 
special  forms  of  policies  by  fire  insurance  companies. 

The  permits  and  clauses  to  be  attached  to  Use  and  Occu- 
pancy, Profits  and  Commissions  policies  are  those  (so  far  as 
they  apply  to  the  subject  of  insurance)  which  would  be 
attached  to  the  ordinary  fire  policy  covering  the  class  of 
property  on  which  the  Use  and  Occupancy,  Profits  and  Com- 
missions are  based. 

In  general,  they  are  those  affecting  interest,  title  or  posses- 
sion, and  increase  of  hazard,  such  as  Special  Agreements 
Nos.  1,  2,  4,  5,  6,  7  and  13 ;  also,  when  applicable,  permits  for 
Lighting,  Mechanics,  and  the  use  of  Gasoline  or  Acetylene 
devices,  etc.,  or  the  use  or  operation  of  anything  else  which 
may  be  held  to  increase  the  hazard. 

The  forms  which  follow  will  serve  perhaps  better  than 
any  explanation  to  illustrate  the  character  and  extent  of  the 
cover  for  these  classes  of  insurance: 

NOTE:  The  following  four  forms  are  the  so-called 
"Uniform"  forms  which  have  been  adopted  for  use  in  prac- 
tically all  of  the  territory  embraced  in  the  New  England, 
Middle,  Southern,  Central  and  Western  States. 

USE   AND    OCCUPANCY 

(For  Manufacturing  Plants  in  Steady  Operation) 
"Straight  U.  &  O." 

On   the    Use    and   Occupancy   of   the   property   described   below. 

The    conditions    of    this    contract    are    that    if    the    building (s) 

situate and   occupied    as and/or    machinery    and/or 

equipment* contained    therein,    be    destroyed    or    damaged 

by  fire  occurring  during  the  term  of  this  policy  so  as  to  neces- 
sitate a  total  or  partial  suspension  of  business,  this  Company 
shall  be  liable  under  this  policy  for  the  actual  loss  sustained 
consisting  of  net  profits  on  the  business  which  is  thereby  pre- 
vented, such  fixed  charges  and  expenses  pertaining  thereto  as  must 


382  THE  AGENTS   KEY  TO  FIRE   INSURANCE  I 

necessarily  continue  during  a  total  or  partial  suspension  of  busi- 
ness and  such  expenses  as  are  necessarily  incurred  for  the  purpose 
of  reducing  the  loss  under  this  policy,  for  not  exceeding  such 
length  of  time  as  shall  be  required,  with  the  exercise  of  due 
diligence  and  dispatch,  to  rebuild,  repair  or  replace  such  part  of     j 

said   building(s)    and   machinery   and    equipment* as   may     j 

be  destroyed  or  damaged  (commencing  with  the  date  of  the  fire  i 
and  not  limited  by  the  date  of  expiration  of  this  policy),  subject  j 
to  the  following  conditions  and  limits,  to-wit:  I 

Total   Suspension. — The   per   diem   liability   under   this   policy  ! 

during  the  time  of  total  suspension  of  business  of  all  the  properties  i 

described  herein  shall  be  limited  to  the  "Actual  Loss  Sustained,"  i 

not   exceeding    1/300 f   of   the    amount   of   this    policy   for  ] 

each    business    day   of    such    suspension,    due    consideration    being  j 

given   to   the    experience   of   the   business   before   the   fire   and   the  * 

probable  experience  thereafter.  j 

Partial  Suspension. — The  per  diem  liability  under  this  policy  ! 
during  the  time  of  partial  suspension  of  business  shall  be  limited 
to  the  "Actual  Loss  Sustained,"  not  exceeding  that  portion  of  '■ 
the  per  diem  liability  that  would  have  been  incurred  by  a  total  I 
suspension  of  business  which  the  actual  per  diem  loss  sustained,  ; 
during  the  time  of  such  partial  suspension,  bears  to  the  per  diem  1 
loss  which  would  have  been  sustained  by  a  total  suspension  of  ^ 
business,  for  the  same  time,  of  all  properties  described  herein,  ' 
due  consideration  being  given  to  the  experience  of  the  business  ; 
before  the  fire  and  the  probable  experience  thereafter.  ^ 

The  word  "business"  wherever  used  in  this  contract  shall  be  i 
construed  to  mean  "The  production  of  goods."  The  word  "stock"  i 
wherever  used  in  this  contract  shall  be  construed  to  mean  i 
"materials"  or  "raw  stock"  entering  into  "the  production  of  goods."      ; 

The  word  "day,"  however,  modified,  wherever  used  in  this  j 
contract,  shall  be  held  to  cover  a  period  of  twenty-four  hours.  | 

The  liability  hereunder  shall  not  exceed  the  amount  of  insur-  I 
ance  by  this  policy,  nor  a  greater  proportion  of  any  loss  than  the  • 
insurance  hereunder  shall  bear  to  all  insurance,  whether  valid  or  '; 
not,  and  whether  collectible  or  not,  covering  in  any  manner  the  j 
loss  insured  against  by  this  policy.  j 

It  is  a  condition  of  this  insurance  that  the  insured  shall  not  be  i 
entitled  to  compensation  on  account  of  delay  which  may  be  ] 
occasioned  by  any  ordinance  or  law  regulating  construction  or  J 
repair  of  buildings,  or  by  the  suspension,  lapse  or  cancellation  ! 
of  any  license,  or  for   any  other  consequential   damage.  ! 

It  is  a  condition  of  this   insurance   that  as  soon   as  practicable      j 
after  any  loss,  the  insured  shall  resume  complete  or  partial  opera-      ' 
tion    of    the    property    herein    described    and    shall    make    use    of 
other  property,   if  obtainable,  if  by  so  doing  the   amount  of  loss 
hereunder    will    be    reduced,    and    in    the    event    of    the    insured      - 
continuing  business   (in  whole  or  in  part)   at  some  other  location,      ! 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS    383 

or  using  other  property  during  the  time  occupied  in  repairing  or 
reconstructing  the  property  described  herein,  the  net  profits  so 
earned  shall  be  applied  to  the  reduction  of  the  loss  and  adjust- 
ment shall  be  made  as  provided  herein  for  partial  suspensions. 

It  is  a  condition  of  this  insurance  that  surplus  machinery  or 
duplicate  parts  thereof,  equipment  or  supplies,  and  (if  this  policy 
covers  liability  for  suspension  of  business  due  to  damage  to,  or 
destruction  of  stock)  surplus  or  reserve  stock,  which  may  be 
owned,  controlled  or  used  by  the  insured  shall,  in  the  event  of 
loss,  be  used  in  placing  the  property  in  condition  for  continuing 
or  resuming  business. 

It  is  a  condition  of  this  insurance,  if  covering  liability  for 
suspension  of  business  due  to  damage  to,  or  destruction  of  stock: 
(1)  That  this  Company  shall  not  be  liable  for  loss  on  account 
of  damage  to  or  destruction  of  the  finished  product,  or  for  the 
time  required  to  reproduce  any  finished  product  which  may  be 
damaged.  (2)  That  liability  for  suspension  of  business  due  to 
damage  to,  or  destruction  of  raw  materials  shall  be  limited  to 
that  period  of  time  for  which  the  damaged  or  destroyed  raw 
materials  would  have  furnished  operating  conditions  for  the  plant; 
but  no  liability  shall  exist  on  this  account,  unless  or  until  actual 
suspension  of  business  shall  have  occurred  through  the  insured's 
inability  to  procure  suitable  materials  to  take  the  place  of  those 
damaged  or  destroyed. 

It  is  a  condition  of  this  insurance,  if  this  policy  covers  liability 
for  suspension  of  business  due  to  damage  to  or  destruction  of 
building(s),  machinery  and  equipment  only,  that  this  company 
shall  not  be  liable  for  any  loss  due  to  damage  to  or  destruction 
of  finished  product  and/or  such  materials  as  enter  into  and 
become  a  part  of  the  finished  product. 

It  is  a  condition  of  this  insurance  that  in  case  the  insured  and 
this  Company  are  unable  to  agree  as  to  any  question  affecting 
the  amount  of  loss  under  this  policy,  the  same  shall  be  deter- 
mined by  appraisers  in  the  manner  provided  by  the  policy  to 
which  this  form  is  attached,  the  provisions  of  which  policy  shall 
govern  in  all  matters  pertaining  to  this  insurance,  except  as 
herein  provided. 

Other  insurance  permitted. 

Note  1: — Lightning  and  other  usual  clauses  regarding  alterations 
and  repairs,  work  and  materials,  hours  of  labor,  protection  war- 
ranties, etc.,  should  be  added  as  permitted  or  required  by  local 
rules. 

*Note  2: — If  liability  for  suspension  of  business  due  to  damage 
to  or  destruction  of  stock  is  to  be  included,  insert  here  "and/or 
stock." 

fNote  3: — If  the  plant  operates  Sundays  and  holidays  the  fraction 
1/300  in  Total  Suspension  Clause  must  be  changed  to  1/365. 


:584 


THE  AGENTS   KEY  TO  FIRE  INSURANCE 


USE   AND    OCCUPANCY 

(For  Manufacturing  Plants  Having  Seasonal  Operations  or 
Fluctuating    Earnings) 

On  the  Use  and  Occupancy  of  the  property  described  below. 

The    conditions    of    this    contract    are    that    if    the    building(s) 

situate and    occupied    as and/or    machinery    and/or 

equipment* contained    therein,    be    destroyed    or    damaged 

by  fire  occurring  during  the  term  of  this  policy  so  as  to  necessitate 
a  total  or  partial  suspension  of  business,  this  Company  shall 
be  liable  under  this  policy  for  the  actual  loss  sustained,  consisting 
of  net  profits  on  the  business  which  is  thereby  prevented,  such 
fixed  charges  and  expenses  pertaining  thereto  as  must  necessarily 
continue  during  a  total  or  partial  suspension  of  business,  and 
such  expenses  as  are  necessarily  incurred  for  the  purpose  of 
reducing  the  loss  under  this  policy  for  not  exceeding  such  length 
of  time  within  the  period  of  liability  as  defined  in  the  "Total 
Suspension"  paragraph  hereof,  as  shall  be  required  with  the 
exercise  of  due  diligence  and  despatch  to  rebuild,  repair  or 
replace  such  part  of  said  building(s)  and  machinery  and  equip- 
ment*  as  may  be  destroyed  or  damaged    (such  rebuilding, 

repair  or  replacement  to  commence  as  soon  as  practicable  after 
thte   fire),   subject  to   the   following   conditions    and   limits,   to-wit: 

Total  Suspension. — The  per  diem  liability  under  this  policy 
during  the  time  of  total  suspension  of  business  of  all  the  properties 
described  herein  shall  be  limited  to  the  "Actual  Loss  Sustained," 
not  exceeding  the  amounts  stated  for  each  day  of  the  respective 
periods  defined  in  the  following  table  and  during  no  other  time, 
due  consideration  being  given  to  the  experience  of  the  business 
before  the  fire  and  the  probable  experience  thereafter. 

For  each  business  day 

.    Month     Day                               Month     Day 
from to  the    following (inclusive)    $ 


Note: — The  stated  per  diem  amounts,  multiplied  by  the  respective 
number  of  business  days  (including  Sundays  and  holidays,  if 
business  is  normally  operated  on  these  days),  during  which  each 
amount   applies   shall    not   in   the   aggregate   for   an    entire   policy 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS    385 

year  exceed  the  total  amount  of  the  policy,  and  the  per  diem 
amounts  shall  be  so  fixed  that  the  liability  under  the  policy  for 
total  suspension  of  business  for  an  entire  policy  year  shall  be 
the  same  whether  such  suspension  be  caused  by  several  fires 
occurring  at  different  periods  of  the  year  or  by  a  single  fire. 

NOTE :  The  balance  of  this  form  reads  exactly  the  same 
as  the  preceding  form  beginning  with  the  caption  ''Partial 
Suspension." 

USE   AND    OCCUPANCY 

(For  Mercantile  or  Non-Manufacturing  Risks  in  Steady  Operation) 
"Straight  U.  &  O." 

On   the    Use    and   Occupancy   of   the   property   described   below : 

The    conditions    of    this    contract    are    that    if    the    building(s) 

situate and    occupied    as and/or   machinery    and/or 

equipment  and/or  stock  contained  therein,  be  destroyed  or  damaged 
by  fire  occurring  during  the  term  of  this  policy  so  as  to  necessitate 
a  total  or  partial  suspension  of  business,  this  Company  shall  be 
liable  under  this  policy  for  the  actual  loss  sustained  consisting 
of  net  profits  on  the  business  which  is  thereby  prevented,  such 
fixed  charges  and  expenses  pertaining  thereto  as  must  necessarily 
continue  during  a  total  or  partial  suspension  of  business,  and  such 
expenses  as  are  necessarily  incurred  for  the  purpose  of  reducing 
the  loss  under  this  policy,  for  not  exceeding  such  length  of  time 
as  shall  be  required,  with  the  exercise  of  due  diligence  and 
dispatch  to  rebuild,  repair  or  replace  such  part  of  said  building(s) 
and  machinery  and  equipment  and  stock  as  may  be  destroyed 
or  damaged  (commencing  with  the  date  of  the  fire  and  not 
limited  by  the  date  of  expiration  of  this  policy),  subject  to  the 
following  conditions  and  limits,  to-wit: 

Total  Suspension. — The  per  diem  liability  under  this  policy 
during  the  time  of  total  suspension  of  business  of  all  the  prop- 
erties   described    herein    shall    be    limited    to    the    "Actual    Loss 

Sustained,"   not   exceeding   1/300 t   of  the    amount   of   this 

policy  for  each  business  day  of  such  suspension,  due  consideration 
being  given  to  the  experience  of  the  business  before  the  fire  and 
the  probable  experience  thereafter. 

Partial  Suspension. — The  per  diem  liability  under  this  policy 
during  the  time  of  a  partial  suspension  of  business  shall  be 
limited  to  the  "Actual  Loss  Sustained,"  not  exceeding  that  pro- 
portion of  the  per  diem  liability  that  would  have  been  Incurred 
by  a  total  suspension  of  business  which  the  actual  per  diem  loss 
sustained,  during  the  time  of  such  partial  suspension,  bears  to 
the  per  diem  loss  which  would  have  been  sustained  by  a  total 
suspension  of  business  for  the  same  time  of  all  properties  described 
herein,  due  consideration  being  given  to  the  experience  of  the 
business   before  the  fire   and  probable   experience  thereafter. 


386  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

The  word  "business"  wherever  used  in  this  contract  shall  be 
construed  to  mean: 

(a)  As  to  a  mercantile  business  "The  sale  of  goods." 

(b)  As  to  other  classes  of  business  "The  carrying  on  of  the 
business  operations  usual  to  the  class." 

The  word  "day,"  however  modified,  wherever  used  in  this 
contract  shall  be  held  to  cover  a  period  of  twenty-four  hours. 

The  liability  hereunder  shall  not  exceed  the  amount  of  insurance 
by  this  policy,  nor  a  greater  proportion  of  any  loss  than  the 
insurance  hereunder  shall  bear  to  all  insurance,  whether  valid 
or  not,  and  whether  collectible  or  not,  covering  in  any  manner 
the  loss  insured  against  by  this  policy. 

It  is  a  condition  of  this  insurance  that  the  insured  shall  not 
be  entitled  to  compensation  on  account  of  delay  which  may  be 
occasioned  by  any  ordinance  or  law  regulating  construction  or 
repair  of  buildings  or  by  the  suspension,  lapse  or  cancellation 
of  any  license,  or  for   any  other  consequential   damage. 

It  is  a  condition  of  this  insurance  that  as  soon  as  practicable 
after  any  loss,  the  insured  shall  resume  complete  or  partial 
operation  of  the  property  herein  described  and  shall  make  use 
of  other  property  if  obtainable,  if  by  so  doing  the  amount  of 
loss  hereunder  will  be  reduced,  and  in  the  event  of  the  insured 
continuing  business  (in  whole  or  in  part)  at  some  other  location, 
or  using  other  property  during  the  time  occupied  in  repairing 
or  reconstructing  the  property  described  herein,  the  net  profits 
so  earned  shall  be  applied  to  the  reduction  of  the  loss  and  adjust- 
ment shall   be   made   as  provided  herein   for  partial    suspensions. 

It  is  a  condition  of  this  insurance  that  surplus  machinery  or 
duplicate  parts  thereof,  equipment  or  supplies,  and  surplus  or 
reserve  stock,  which  may  be  owned,  controlled  or  used  by  the 
insured  shall,  in  the  event  of  loss,  be  used  in  placing  the  property 
in  condition  for  continuing  or  resuming  business. 

It  is  a  condition  of  this  insurance  that  in  case  the  insured  and 
this  Company  are  unable  to  agree  as  to  any  question  affecting 
the  amount  of  loss  under  this  policy,  the  same  shall  be  determined 
by  appraisers  in  the  manner  provided  by  the  policy  to  which 
this  form  is  attached,  the  provisions  of  which  policy  shall  govern 
in  all  matters  pertaining  to  this  insurance  except  as  herein 
otherwise  provided. 

It  is  a  condition  of  this  insurance,  if  this  policy  covers  liability 
for  suspension  of  business  due  to  damage  to  or  destruction  of 
building(s),  machinery  and  equipment  only,  that  this  Company 
shall  not  be  liable  for  any  loss  due  to  damage  to  or  destruction 
of  finished  product  and/or  such  materials  as  enter  into  and  become 
a  part  of  the  finished  product. 

Other  insurance  permitted. 

Note    1: — Attach    lightning   and    other    usual    clauses    regarding 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS   387 


alterations  and  repairs,  work  and  materials,  hours  of  labor, 
protection  warranties,  etc.,  should  be  added  as  permitted  or 
required  by  local   rules. 

fNote  2: — If  the  plant  operates  Sundays  and  holidays  the  fraction 
1/300  in  Total  Suspension  Clause  must  be  changed  to  1/365. 

USE   AND    OCCUPANCY 

(For    Mercantile    or    Non-Manufacturing    Risks    Having   Seasonal 
Operations  or  Fluctuating  Earnings) 

On  the  Use  and  Occupancy  of  the  property  described  below. 

The    conditions    of    this    contract    are    that    if    the    building  (s) 

situate and    occupied    as and/or    machinery    and/or 

equipment  and/or  stock  contained  therein,  be  destroyed  or  damaged 
by  fire  occurring  during  the  term  of  this  policy  so  as  to  necessitate 
a  total  or  partial  suspension  of  business,  this  Company  shall  be 
liable  under  this  policy  for  the  actual  loss  sustained,  consisting 
of  net  profits  on  the  business  which  is  thereby  prevented,  such 
fixed  charges  and  expenses  pertaining  thereto  as  must  necessarily 
continue  during  a  total  or  partial  suspension  of  business,  and 
such  expenses  as  are  necessarily  incurred  for  the  purpose  of 
reducing  the  loss  under  this  policy,  for  not  exceeding  such  length 
of  time  within  the  period  of  liability  as  defined  in  the  "Total 
Suspension"  paragraph  hereof,  as  shall  be  required  with  the 
exercise  of  due  diligence  and  dispatch  to  rebuild,  repair  or  replace 
such  part  of  said  building (s)  and  machinery  and  equipment  and 
stock  as  may  be  destroyed  or  damaged  (such  rebuilding,  repair 
or  replacement  to  commence  as  soon  as  practicable  after  the  fire), 
subject  to  the  following  conditions  and  limits,  to-wit: 

Total  Suspension. — The  per  diem  liability  under  this  policy 
during  the  time  of  total  suspension  of  business  of  all  the  properties 
described  herein  shall  be  limited  to  the  "Actual  Loss  Sustained," 
not  exceeding  the  amounts  stated  for  each  day  of  the  respective 
periods  defined  in  the  following  table  and  during  no  other  time, 
due  consideration  being  given  to  the  experience  of  the  business 
before  the  fire  and  the  probable  experience  thereafter. 
For  each  business  day 

Month     Day                                Month     Day 
from to   the   following (inclusive)    $ 


388  THE  AGENTS   KEY  TO  FIRE   INSURANCE 

Note: — The  stated  per  diem  amounts,  multiplied  by  the  respec- 
tive number  of  business  days  (including  Sundays  and  holidays, 
if  business  is  normally  operated  on  those  days)  during  which 
each  amount  applies  shall  not  in  the  aggregate  for  an  entire 
policy  year  exceed  the  total  amount  of  the  policy,  and  the  per 
diem  amounts  shall  be  so  fixed  that  the  liability  under  the  policy 
for  total  suspension  of  business  for  an  entire  policy  year  shall  be 
the  same  whether  such  suspension  be  caused  by  several  fires 
occurring  at  different  periods  of  the  year  or  by  a  single  fire. 

NOTE:  The  balance  of  the  form  reads  exactly  the  same 
as  the  preceding  form  beginning  with  the  caption  **  Partial 
Suspension, ' ' 

USE  AND  OCCUPANCY  FORMS 
(Coal  Mining  Plants) 

The  foregoing  forms  may  be  used  on  this  class  and  com- 
monly contain  one  or  the  other  of  the  following  chauses 

Clause  1.  "In  consideration  of  the  rate  at  and/or  form  under 
which  this  policy  is  written,  it  is  hereby  understood  and  agreed 
that   this    policy   shall    cover    loss    of    use    and    occupancy   of   this 

plant  occasioned  by  reason  of  damage  to  the Electric  Power 

Plant  by  fire  and/or  lightning,  whereby  electric  current  furnished 
by  said  plant  to  the  insured   shall   be   diminished   or   suspended." 

Note: — Additional  rate  charged  is  usually  50%  of  power  plant 
rate. 

Clause  2.  "In  consideration  of  the  rate  at  and/or  form  under 
which  this  policy  is  written,  it  is  expressly  warranted  by  the 
assured  that  the  power  used  for  the  operation  of  the  plant,  the 
use  and  occupancy  of  which  is  insured  hereunder,  is  secured 
only  from  power  plants  located  outside  of  assured's  premises  and 
not  owned  or  controlled  by  said   assured." 

USE  AND    OCCUPANCY    (LIMITED) 

{Net  Profits  Only) 
On  the  net  profits  of  the  property  described  below: 
(1)   The  conditions  of  this  contract  are  that  if  the  building(s) 

situate and    occupied    as and/or    machinery    and/or 

equipment* contained    therein,    be    destroyed    or    damaged 

by  fire  occurring  during  the  term  of  this  policy  so  as  to  necessitate 
a  total  or  partial  suspension  of  business,  this  company  shall  be 
liable  under  this  policy  for  the  actual  loss  sustained  consisting  of 
net  profits  on  the  business  which  is  thereby  prevented  and  such 
expenses  as  are  necessarily  incurred  for  the  purpose  of  reducing 
the  loss  under  this  policy,  for  not  exceeding  such  length  of  time 
as    shall    be    required,    with    the    exercise    of    due    diligence    and 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS    389 

dispatch,  to  rebuild,  repair  or  replace  such  part  of  said  building(s) 

and    machinery    and    equipment* as    may   be    destroyed   or 

damaged  (commencing  with  the  date  of  the  fire  and  not  limited 
by  the  date  of  expiration  of  this  policy),  subject  to  the  following 
conditions  and  limits,  to  wit: 

NOTE :  The  balance  of  the  form  reads  exactly  the  same 
as  the  preceding  forms,  beginning  with  the  caption  ''Total 
Suspension. '^ 

USE  AND    OCCUPANCY    (LIMITED) 

{Fixed  Charges  and  Expenses  Only) 

$....0n  the  fixed  charges  and  expenses  pertaining  to  the  in- 
sured's use  and  occupancy  of  the  building....,  or  machinery,  or 
equipment (insert  "or  stock"  if  policy  is  to  cover  replace- 
ment of  same;  otherwise  policy  shall  not  so  cover)  contained 
therein,  situated and  occupied  for 

It  is  understood  and  agreed  that  notwithstanding  any  phrase- 
ology herein  to  the  contrary,  liability  is  assumed  hereunder  only 
for  such  fixed  charges  and  expenses  as  are  hereinafter  defined. 

The  word  "stock,"  wherever  used  in  this  contract  shall  be 
construed  to  mean  "materials"  or  "raw  stock"  used  in  the  process 
of  manufacture. 

The  conditions  of  this  contract  are  that  if  the  above  described 
property  be  destroyed  or  damaged  by  fire  occurring  during  the 
term  of  this  policy  so  as  to  necessitate  a  total  or  partial  suspension 
of  business,  this  company  shall  be  liable  under  this  policy  for 
such  fixed  charges  and  expenses  as  must  necessarily  continue 
during  a  total  or  partial  suspension  of  business,  and  for  such 
expenses  as  are  necessarily  incurred  for  the  purpose  of  reducing 
the  loss  under  this  policy,  each  for  not  exceeding  such  length  of 
time  as  shall  be  required,  with  the  exercise  of  due  diligence  and 
dispatch,  to  rebuild,  repair  or  replace  such  part  of  said  property 
as  may  be  destroyed  or  damaged  (commencing  with  the  date  of 
the  fire  and  not  limited  by  the  date  of  expiration  of  this  policy) 
subject  to  the  following  conditions  and  limits,  to-wit: 

NOTE:  The  balance  of  the  form  reads  exactly  the  same 
as  the  preceding  forms  beginning  with  the  caption  **  Total 
Suspension. 

USE  AND  OCCUPANCY  (BUSINESS  INTERRUPTION) 

FORM 

{For  Manufacturing  Plants) 
{Illustration) 
$.  .  .  .On  the  Use  and  Occupancy  of  the  buildings  and  machinery 
equipment   thereof  occupied   for   manufacturing  purposes   and   con- 
stituting the  plant  known  as ,  situate 


390  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

If  the  said  buildings  and/or  machinery  equipment  thereof  be 
so  damaged  or  destroyed  by  fire,  occurring  during  the  term  and 
under  the  conditions  of  this  policy,  as  to  wholly  or  partially 
prevent  the  insured  from  carrying  on  manufacturing  operations, 
then  this  Company  shall  be  liable  for  the  actual  loss  of  net  profits 
thereby  sustained,  and  for  such  fixed  maintenance  charges  and 
expenses  as  must  necessarily  continue  during  the  period  of  such 
prevention,  subject  to  the  following  conditions,  to-wit: 

In  case  of  total  prevention  liability  hereunder  shall  not  exceed 
$....,  being  l/..,.of  the  amount  of  this  policy,  for  each  working 
day  of  such  prevention ;  or,  in  case  of  partial  prevention,  the 
liability  hereunder  shall  not  exceed  that  proportion  of  said  amount 
per  diem  that  the  production  so  prevented  bears  to  the  normal 
production,  meaning  thereby  the  production  which  conditions  exist- 
ing at  time  of  fire  show  might  reasonably  have  been  expected 
during  the  period  of  such  prevention. 

Lightning  Clause  for  Use  and  Occupancy 
Except  as  provided  in  the  Electrical  Exemption  Clause  below, 
this  policy  shall  cover  use  and  occupancy  loss  caused  by  lightning 
(meaning  thereby  the  commonly  accepted  use  of  the  term  "light- 
ning," and  in  no  case  to  include  loss  or  damage  by  cyclone, 
tornado,  or  windstorm),  not  exceeding  the  sum  insured,  nor  the 
interest  of  the  insured  in  the  property.  Provided,  however,  if 
there  shall  be  any  other  use  and  occupancy  insurance  on  said 
property,  this  company  shall  be  liable  only  pro  rata  with  such 
other  insurance  for  any  use  and  occupancy  loss  by  lightning, 
whether  such  insurance  be  against  loss  by  lightning  or  not. 

Electrical   Exemption   Clause 

It  is  a  special  condition  of  this  Policy  that  this  Company  shall 
not  be  liable  for  any  use  and  occupancy  loss  resulting  from 
damages  to  dynamos,  exciters,  lamps,  switches,  motors  and  other 
electrical  appliances  or  devices  caused  by  electrical  injury  or 
disturbance,  whether  artificial,  natural  or  by  lightning,  unless  fire 
ensues,  and  then  for  loss  by  fire  only. 

It  is  understood  and  agreed: 

That  a  working  day  means  the  calendar  day  of  twenty-four 
hours; 

That  loss,  if  any,  is  to  be  computed  from  date  of  fire  to  the 
time  (whether  or  not  this  falls  within  the  term  of  this  policy, 
but  not  for  more  than  a  year  following  the  fire)  required  with 
ordinary  diligence  and  despatch  to  repair  or  restore  the  damaged 
property  so  that  normal  production  may  be  resumed; 

That  if  goods  are  produced  elsewhere  because  of  and  during 
such  suspension  of  operations,  the  value  of  the  Use  and  Occu- 
pancy thus  earned  shall  be  deducted  from  the  amount  otherwise 
recoverable  under  this  policy,  and  the  insured  agrees  to  utilize 
in  such  manufacturing  operations,  where  practicable,  the  services 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS    391 

of  employees  whose  wages  are  included  under  the  head  of 
"Maintenance  charges  and  expenses"; 

That  any  surplus  machinery  or  duplicate  parts  thereof,  or 
equipment  or  supplies,  which  may  be  owned  or  controlled  or 
used  by  the  insured,  shall  in  the  event  of  loss  be  used  in  placing 
the  herein  described  buildings  and/or  machinery  equipment  in 
condition  to  resume  operations; 

That  this  policy  applies  only  to  buildings  and  machinery  that 
contribute  to  the  completion  of  the  product  of  the  plant,  and  all 
storehouses  and  their  contents  are  excluded  unless  specifically 
provided  for  hereunder; 

That  this  policy  does  not  cover  loss  caused  by  a  fire  elsewhere 
than  in  the  above  described  plant. 

Privilege  Granted:  For  other  insurance;  for  kerosene  oil  stoves 
for  heating  and  cooking;  to  make  ordinary  additions,  alterations 
and  repairs;  to  do  such  work  and  to  keep  and  use  such  materials 
and  supplies  as  are  usual  in  the  above  described  manufacturing 
business. 

Attached  to  and  forming  part  of  Policy  No of  the 

Insurance  Company. 

USE  AND  OCCUPANCY 

{Street  Railtvay  Property) 
(Illustration) 

$ On  the   Use  and  Occupancy  of  the  electrical  power  plant, 

car  barns  and  shops,  situate  at 

The  conditions  of  this  contract  of  insurance  are  that  if  any  of 
the  buildings  or  machinery  therein,  or  rolling  stock  contained  in 
the  buildings  or  stored  on  tracks  adjacent  shall  be  so  disabled  by 
fire  occurring  during  the  term  and  under  the  conditions  of  this 
policy  as  to  entirely  suspend  the  generation  and  distribution  of 
electrical  energy  and  the  operation  of  their  Street  Railway  lines, 
then  this  Company  shall  be  liable  for  an  amount  not  exceeding 
$. . .  .per  day  for  each  working  day  of  such  suspension,  and  in  case 
the  said  buildings,  machinery  or  rolling  stock  are  so  disabled  by 
fire  as  to  prevent  the  making  of  a  full  daily  average  receipts  from 
fares  or  the  sale  of  electrical  energy,  this  Company  shall  be  liable 
per  day  for  not  exceeding  that  proportion  of  $,... which  the  re- 
ceipts so  prevented  from  being  made  bear  to  the  average  daily 
receipts  previous  to  the  fire,  which  for  the  purpose  of  this  insur- 
ance is  agreed  to  be  the  full  daily  average  for  three  hundred  and 
sixty-five  (365)  working  days  immediately  preceding  the  fire,  not 
exceeding  in  either  case  the  face  value  of  the  policy. 

In  the  event  of  the  car  service  and/or  supply  of  electrical  energy 
being  restored  in  whole  or  in  part  by  reason  of  the  assured  renting 
cars  and/or  purchasing  power,  then  the  claim  against  this  Com- 
pany for  the  amount  payable  per  day,  above  referred  to,  shall  be 


302  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

reduced  by  the  amount  in  which  the  income  on  said  day,  as  a 
result  of  said  renting  of  cars  and/or  purchasing  of  power,  exceeds 
the  expense  incurred  therefor  for  account  of  said  day. 

It  is  understood  that  in  the  event  of  loss  under  this  policy  caused 
by  the  suspension  or  damage  of  cars  or  buildings,  the  same  shall 
be,  so  far  as  possible,  replaced  by  any  available  surplus  cars  or 
spare  parts,  but  the  assured  shall  not  be  required  to  use  open 
cars  when  the  weather  is  unseasonable  for  their  use. 

Loss,  if  any,  to  be  computed  from  the  day  of  the  occurrence  of 
any  fire  to  the  time  when  the  said  buildings,  machinery  or  rolling 
stock  could  with  ordinary  diligence  and  dispatch,  be  repaired  or 
rebuilt  and  replaced  and  not  limited  to  the  day  of  expiration  named 
in  this  policy. 

A  period  of  twenty-four  (24)  hours  constitutes  the  day  referred 
to  in  this  policy  form. 

Dynamo  Clause. 

Permission  to  make  additions,  alterations  and  repairs.  To  run 
all  night.  To  use  kerosene  oil  for  lights.  To  have  and  make  other 
insurance  without  notice  until  requested. 

USE  AND  OCCUPANCY   (CANNERY) 

{Illustration) 

$ On  the  Use  and  Occupancy  of  their  frame  buildings,  addi- 
tions and  platforms  and  machinery  therein,  situate  at  and  occu- 
pied by  them  as  a  canning  establishment. 

Total  Loss. — The  conditions  of  this  contract  of  insurance  are, 
that,  if  any  of  the  buildings  used  for  canning  purposes,  or  machinery 
therein,  shall  be  so  disabled  by  fire  or  lightning  during  the  term 
and  under  the  conditions  of  this  policy,  that  the  assured  are  en- 
tirely prevented  from  canning  the  1916  crop  of  vegetables  and/or 
fruit  then  this  policy  shall  be  liable  for  a  total  loss. 

Partial  Loss. — If  the  buildings  or  any  part  thereof  shall  be  dam- 
aged by  fire  or  lightning  during  the  term  of  this  policy  and  the 
said  damage  can,  with  ordinary  diligence  and  dispatch,  be  re- 
paired and  machinery  installed  prior  to  commencement  of  1916 
canning  season,  then  this  Company  shall  not  be  liable  for  any  loss; 
if,  however,  the  completion  of  repairs  and  installation  of  ma- 
chinery, with  ordinary  diligence  and  dispatch,  requires  time  after 
the  commencement  of  the  canning  season  of  1916  to  put  the  factory 
in  running  order,  then  this  Company  shall  be  liable  for  actual  loss 
sustained  by  assured  not  exceeding  twenty  (20)  cents  per  case  for 
overhead  charges  and  profits  for  each  case  that  the  assured  are 
deprived  of  packing,  and  not  exceeding  ten  (10)  cents  per  case 
profits  on  each  case  of  the  1916  crop  of  vegetables  and/or  fruit 
packed  and  destroyed  or  damaged. 

It  is  a  condition  of  this  contract  that  in  case  fire  or  lightning 
occur  under  conditions  that  the  assured  suffers  no  loss  from  the 
inability    to   use    the    buildings    and    machinery    mentioned    herein 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS    393 

during  the  term  of  this  policy  then  no  claim  shall  be  made  there- 
under. 

It  is  hereby  agreed  and  made  a  condition  of  this  contract  that 
assured  shall  maintain  insurance  under  this  form  to  the  amount  of 

$ and  in  event  of  loss  this  Company  shall  be  liable  for  no 

greater  proportion  thereof  than  the   amount  hereby  insured  bears 
to  $ 

USE  AND  OCCUPANCY 

(Chemical  Laboratory) 
{Illustration) 

On  the  use  and  occupancy  of  their  laboratories  and  offices, 
situate 

It  is  understood  and  agreed  that  if  by  reason  of  fire  on  the 
above  mentioned  premises  or  in  the  above  mentioned  building,  the 
assured  shall  be  put  to  any  expense  in  the  matter  of  replacing,  re- 
pairing or  verifying  destroyed  or  damaged  plans,  records  and/or 
manuscripts  of  every  description,  and/or  owing  to  the  necessity  of 
removal  or  temporary  removal  to  other  premises,  and/or  extra 
expense  caused  by  having  to  temporarily  use  or  hire  other  labora- 
tories, or  having  to  farm  out  work  to  other  laboratories,  and  also 
covering  any  loss  of  labor  actually  performed,  then  this  Company 
shall  be  liable  for  the  actual  expense  or  loss  so  incurred;  and  this 
Company  shall  also  be  liable  for  any  loss  the  assured  shall  sus- 
tain due  to  their  inability  to  transact  their  usual  amount  of  busi- 
ness (based  on  the  twelve  months  immediately  preceding  the  date 
of  the  fire)  from  the  time  of  the  fire  to  the  date  (whether  same 
shall  fall  within  the  term  of  this  policy  or  not)  when  their  regular 
amount  of  business  might  by  exercising  due  diligence  be  again 
resumed,  but  in  no  event  shall  this  Company  be  liable  in  the  par- 
ticular or  in  the  aggregate  for  more  than  the  amount  of  this 
policy  or  for  their  pro  rata  proportion  of  the  total  amount  of  in- 
surance carried  by  the  assured  upon  use  and  occupancy,  nor  for 
a  greater  proportion  of  any  loss  than  this  policy  bears  to  the  an- 
nual value  of  the  Use  and  Occupancy. 

(Add  usual  clauses.) 

USE  AND  OCCUPANCY 

{Mercantile) 

{Illustration) 
On  the  value  to  them  for  the  purposes  of  Use  and/or  Occupancy 

of situate occupied  as 

It  is  agreed  that  if  by  reason  of  fire  and/or  lightning  on  the 
above  mentioned  premises,  the  assured  shall  be  wholly  prevented 
from  carrying  on  its  business,  then  this  Company  shall  be  liable 
for  l/300th  part  of  this  policy  per  day  for  each  working  day  from 
date  of  said  fire  to  date  (whether  the  same  fall  within  the  terras 
of  this  policy  or  not)   when  normal  business  might,  with  reason- 


394  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

able  diligence  have  been  commenced.  But  if  the  normal  business 
is  diminished  only,  then  shall  this  company  be  liable  for  the  pro- 
portion of  said  per  diem  as  may  be  determined  by  the  following 
data: 

Should  fire  and/or  lightning  cause  such  damage  to  the  entire 
first  floor  as  to  involve  a  complete  interruption  of  business  thereon 
without  interfering  with  the  business  of  the  rest  of  the  store,  then 
thirty  (30%)  per  cent,  of  the  full  per  diem  shall  be  paid,  but  if 
only  the  front  half  of  the  first  floor  shall  be  involved,  then  2/3ds 
of  the  thirty  (30%)  per  cent,  should  be  paid  and  l/3d  if  the  rear 
half  only  is  involved. 

Should  only  the  second  floor  be  involved,  15%  of  per  diem 
shall  be  paid. 

Should  only  the  third  floor  be  involved,  15%  of  per  diem  shall 
be  paid. 

Should  only  the  fourth  floor  be  involved,  5%  of  per  diem  shall 
be  paid. 

Should  only  the  fifth  floor  be  involved,  5%  of  per  diem  shall 
be  paid. 

Should  only  the  sixth  floor  be  involved,  10%  of  per  diem 
shall  be  paid. 

Should  only  the  seventh  floor  be  involved,  5%  of  per  diem 
shall  be  paid. 

Should  only  the  eleventh  floor  be  involved,  5%  of  per  diem 
shall  be  paid. 

Should  only  the  basement  floor  be  involved,  10%  of  per  diem 
shall  be  paid. 

Should  a  portion  of  any  of  the  floors  except  the  first  be  involved 
then  there  should  be  payable  the  proportion  that  that  portion  of  the 
floor  bears  to  the  entire  floor. 

Should  a  portion  of  the  front  half  of  the  first  floor  be  involved, 
then  there  shall  be  payable  the  proportion  that  that  portion  of  the 
floor  bears  to  the  entire  front  half  of  the  floor. 

Should  a  portion  of  the  rear  half  of  the  first  floor  be  involved, 
then  there  shall  be  payable  the  proportion  that  that  portion  of  the 
floor  bears  to  the  entire  rear  half  of  the  floor. 

In  the  event  of  loss,  the  front  half  of  the  first  floor  shall  be  con- 
strued  as   extending   eastwardly   one   hundred   and   twenty    (120) 

feet  from  the street  frontage,    and   the   rear   half  from   a 

point  one  hundred  and  twenty  (120)  feet  eastward  of  the 

street  frontage  to  the  rear  of  the  building  on street. 

Should  a  fire  and/or  lightning  cause  such  damage,  necessitating 
the  suspension  of  the  elevator  service,  then  this  Company  shall  be 
liable  in  an  amount  (not  exceeding)  one-half  of  the  total  loss 
schedule  for  each  floor  above  the  first,  and  in  the  event  of  sus- 
pension of  one  or  more  elevators  by  reason  of  damage  by  fire 
and/or  lightning,  then  this  Company  shall  be  liable  in  that  pro- 
portion of.  one-half  of  the  total  loss  schedule  for  each  floor  above 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS   395 

the  first  that  the  number  of  elevators  damaged  bears  to  the  total 
number  of  elevators  in  the  building. 

It  is  understood  that  in  arriving  at  the  amount  of  insurance  re- 
quired under  this  form,  the  assured  have  included  the  estimated 
average  increase  in  results  or  profits,  basing  their  figures  on  the 
sales  for  the  preceding  year  and  adding  thereto  an  amount  equal 
to  such  increase  and  this  policy  to  cover  accordingly. 

The  purpose  of  this  insurance  is  to  protect  the  assured  against 
loss  of  use  of  the  premises  in  whole  or  in  part,  loss  of  profit,  loss 
of  all  fixed  charges  and  loss  of  such  sums  as  are  necessary  to  be 
paid  by  the  assured  for  the  purpose  of  retaining  employees  whether 
under  contract  or  not  in  order  to  maintain  the  organization,  and 
it  is  agreed  that  the  amount  of  said  loss  shall  be  as  above  set 
forth. 

Loss,  if  any,  to  be  computed  from  the  day  of  the  occurrence  of 
any  fire  to  the  time  when  the  said  buildings  or  parts  thereof  could 
with  ordinary  diligence  and  dispatch  be  repaired  and  rebuilt,  and 
contents  replaced,  and  not  limited  by  the  day  of  expiration  named 
in  the  policy.  In  no  event  shall  this  Company  be  liable  for  larger 
amount  than  insured  under  this  policy. 

(Add  usual  clauses.) 

USE  AND  OCCUPANCY 

{Hotels) 

On  the  Use  and  Occupancy  of  the  hotel  property,  known  as  the 
situate 

If  the  aforesaid  hotel  property  be  damaged  or  destroyed  by  fire 
during  the  term  of  this  policy,  whereby  the  assured  shall  sustain 
loss  of  revenue  therefrom,  the  liability  of  this  Company  for  said 
loss  shall  be  upon  the  following  conditions: 

First:  For  any  calendar  day  the  revenue  of  which,  by  reason  o!: 
such  fire,  is  nil,  the  loss  shall  not  be  deemed  to  exceed  the  normal 
revenue  for  the  day;  nor  shall  this  Company's  liability  therefor 
exceed  $ 

Second:  For  any  calendar  day  the  revenue  of  which,  by  reason 
of  such  fire,  is  impaired  only,  the  loss  shall  not  be  deemed  to 
exceed  such  impairment;  nor  shall  this  Company's  liability  therefor 

exceed  that  proportion  of  $ which  such  impairment  shall  bear 

to  tlje  normal  revenue  for  the  day. 

Third:  Loss,  if  any,  to  be  computed  from  the  time  of  the  oc- 
currence of  any  fire  to  the  time  when  the  said  hotel  property  could, 
with  ordinary  diligence  and  dispatch,  be  repaired  and/or  replaced, 
except  that  such  computation  shall  not  include  any  portion  of 
time  subsequent  to  the  expiration  of  this  policy. 

By  "the  normal  revenue  for  the  day"  as  used  above  is  meant  the 
revenue  which,  but  for  the  fire,  would  have  been  derived  from  the 
said  hotel   property. 

(Add  usual  clauses.) 


396  THE  AGENTS  KEY  TO  FIRE   INSURANCE 

USE  AND  OCCUPANCY  (HOTELS) 

(Illustration) 

$....0n  the  Use  and  Occupancy  of  the  building  and  additions 
occupied  as  the hotel, situate 

The  conditions  of  this  contract  are,  that,  if  said  building  or 
additions  and/or  their  contents,  used  for  hotel  purposes,  shall  be  so 
damaged  by  fire,  occurring  during  the  term  and  under  the  con- 
ditions of  this  policy,  that  the  insured  is  entirely  prevented  from 
transacting  the  hotel  business  in  the  described  premises,  then  this 
Company  shall  be  liable  for  not  exceeding  l/365th  of  the  amount 
of  this  policy  for  each  day  of  such  prevention,  but  if  the  insured 
is  only  partially  prevented  from  transacting  his  normal  amount 
of  business,  then  shall  this  Company  be  liable  per  day  for  that 
portion  of  the  amount  payable  per  day  for  total  prevention  by 
which  the  normal  business  is  diminished. 

It  is  part  of  the  consideration  for  which  this  policy  is  issued 
that  the  insured  hereby  covenants  and  agrees  to  keep  a  set  of 
books  of  account  showing  a  complete  record  of  business  transacted 
which  shall  be  available  to  aid  in  the  determination  of  loss,  if 
any,  under  this  contract. 

A  period  of  twenty-four  (24)  hours  constitutes  the  day  referred 
to  in  this  policy  form,  and  loss,  if  any,  to  be  computed  from  the 
day  of  the  occurrence  of  any  fire  to  the  time  when  the  said  build- 
ing and  additions  could,  with  ordinary  diligence  and  dispatch,  be 
repaired  and  rebuilt,  and  contents  replaced,  and  not  limited  by  the 
day  of  expiration  named  in  the  policy.  In  no  event  shall  this 
Company  be  liable  for  a  larger  amount  than  is  insured  under  this 
policy. 

Attach  lightning,  dynamo  and  other  usual  clauses. 

USE  AND  OCCUPANCY  (MOTION  PICTURE 
THEATRE) 

{Suited  for  any  Theatre) 
{Illustration) 

$,...0n   the Use    and/or   Occupancy   of  the roof 

building  and  additions,  and  of  the  equipment  thereof  other 

than  films,  occupied  as  a  Motion  Picture  Theatre,  situate 

If  the  aforesaid  property  be  damaged  or  destroyed  by  fire  dur- 
ing the  term  of  this  policy,  whereby  the  assured  shall  sustain  loss 
of  revenue  therefrom,  the  liability  of  this  Company  for  said  loss 
shall  be  upon  the  following  conditions: 

First. — For  any  calendar  day  in  which,  by  reason  of  such  fire, 
the  revenue  is  nil,  the  loss  shall  not  be  deemed  to  exceed  the 
normal  revenue  for  the  day;  nor  shall  this  Company's  liability 
therefor  exceed  l/300th  of  the  amount  of  this  policy. 

Second. — For  any  calendar  day  in  which,  by  reason  of  such 
fire,  the  revenue  is  impaired,  the  loss  shall  not  be  deemed  to  ex- 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS    397 

ceed  such  impairment;  nor  shall  this  Company's  liability  therefor 
exceed  that  proportion  of  l/300th  of  the  amount  of  this  policy 
which  such  impairment  shall  bear  to  the  normal  revenue  for  the 
day. 

Third. — Loss,  if  any,  to  be  computed  from  the  time  of  the  oc- 
currence of  such  fire  to  the  time  when  the  said  property  could, 
with  ordinary  diligence  and  dispatch,  be  repaired  and/or  re- 
placed. 

By  "the  normal  revenue  for  the  day"  as  used  above  is  meant 
the  revenue  which,  but  for  the  fire,  would  have  been  derived 
from  such  use  and  occupancy  of  said  property. 

This  policy  shall  cover  any  direct  use  and  occupancy  loss  or 
damage  caused  by  Lightning  (meaning  thereby  the  commonly  ac- 
cepted use  of  the  term  "Lightning,"  and  in  no  case  to  include  loss 
or  damage  by  cyclone,  tornado,  or  windstorm),  not  exceeding  the 
sum  insured,  nor  the  interest  of  the  insured  in  the  property,  and 
subject  in  all  other  respects  to  the  terms  and  conditions  of  this 
policy.  Provided,  however,  if  there  shall  be  any  other  similar  in- 
surance on  said  property,  this  Company  shall  be  liable  only  pro 
rata  with  such  other  insurance  for  any  direct  loss  by  Lightning, 
whether  such  other  insurance  be  against  direct  loss  by  Lightning 
or  not,  however,  this  policy  does  not  cover  use  and  occupancy 
loss  due  to  stoppage  of  dynamos,  motors  or  other  apparatus  for 
generating,  utilizing,  regulating  or  distributing  electricity  caused 
by  any  defect  or  break  in  the  insulation  or  apparatus  or  by  excess 
current,  whether  artificial  or  natural. 

Permission  is  given:  For  existing  communications;  for  other  in- 
surance without  notice  until  required;  to  make  ordinary  altera- 
tions and  repairs  in  the  within  described  building,  but  this  shall 
not  be  held  to  include  the  reconstruction  or  the  enlargement  of  the 
same;  to  use  kerosene  oil  and  natural  gas  for  lighting,  heating  and 
cooking,  providing  kerosene  is  of  the  standard  110  degree  test  or 
more;  to  do  such  work  and  to  use  such  materials  as  are  usual  to 
the  business  of  Motion  Picture  Theatres. 

(Add  usual  clauses.) 

USE  AND  OCCUPANCY   FORM 

{School) 
{Illustration) 
($100,000)   On  the  use  and  occupancy  of  the  property  belonging 
to  or  leased  by School,  situate 

It  is  understood  and  agreed: 

That  this  policy  covers  the  annual  receipts  from  tuition  fees  on 
(200)    pupils   attending  said  school,  at   ($500)    each; 

That  in  the  event  of  damage  or  destruction  by  fire  of  any  part 
of  the  property  situate  as-  above  described  and  occupied  in  connec- 
tion with  said  school,  the  insured  will  use  every  reasonable  eflFort 
to  secure  and  occupy  other  buildings  or  property  in  place  of  such 


398  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

as  may  be  damaged  or  destroyed,  in  order  to  prevent  so  far  as 
possible  any  reduction  in  the  number  of  pupils  in  consequence  of 
the  fire.  The  expense  necessitated  by  such  transfer  of  occupancy 
shall  be  a  part  of  the  loss; 

That  the  amount  of  loss  under  this  policy  occasioned  by  fire 
shall  not  exceed  the  sum  of  ($500)  per  pupil,  from  which  amount 
shall  be  deducted  the  earned  portion  of  the  said  ($500),  which 
shall  be  due  and  accrued  at  the  time  of  fire,  and  no  claim  per 
pupil  shall  be  made  unless  the  number  of  pupils  shall  be  reduced 
as  the  result  of  such  fire  to  a  less  number  than 

(Attach %  Coinsurance  and  the  Lightning  Clauses,  and  other 

tisual  or  required  clauses.) 

USE  AND  OCCUPANCY  FORM  (SCHOOL) 

{Illustration) 
On  the  annual  receipts  of  tuition  fees  of  pupils,  of  the  receipt 
of  which  the  assured  is   deprived  by  reason  of  fire  occurring  in 
any  of  the  buildings  used  for  school  purposes  on  premises  situate 


It  is  a  condition  of  this  insurance  that  in  case  of  loss,  the 
liability  of  this  Company  shall  be  for  actual  loss  sustained  for 
not  exceeding  that  proportion  of  the  amount  of  this  policy  that 
the  tuition  fees  receivable  for  the  pupils  which  the  assured  is 
unable,  by  reason  of  fire,  to  provide  for  bears  to  the  tuition  fees 
receivable  for  all  the  pupils  enrolled  for  the  school  year.  It 
is  understood  and  agreed,  however,  that  if  fire  occurs  prior  to 
date  of  commencement  of  school  year  the  tuition  fees  receivable 
shall  be  based  on  the  fees  actually  received  during  the  previous 
school  year. 

It  is  understood  that  in  the  event  of  loss  or  damage  through 
fire  to  any  part  of  the  property  described  herein,  the  assured  will 
use  every  effort  to  occupy  other  buildings  in  the  place  of  those 
damaged  or  destroyed,  the  expense  necessitated  by  such  transfer 
of  occupancy  to  be  covered  by  this  insurance,  if  by  so  doing  the 
amount  of  loss  under  this  policy  will  be  reduced. 

USE  AND  OCCUPANCY 

{Profits   Only) 
{Illustration) 

(Used  where  one  certain  part  necessary  to  finish  goods  manufac- 
tured was  stored  in  quantities  until  near  the  season  for  shipment, 
when  they  were  attached  and  the  product  delivered.) 

$ On   profits   contingent   on   the   use   of   the   contents   of   the 

three-story    brick   building    known    as    the    Warehouse,    situate    on 
their  premises  at 

It  is  the  intention  of  this  insurance  to  indemnify  the  assured  for 
loss  of  profits  sustained  by  reason  of  the  contents  of  said  ware- 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS   399 

house  being  so  damaged  by  fire,  or  by  lightning,  that  the  assured 
is  unable  to  fill  orders  for  goods  whereby  profit  would  have  been 
realized.  It  is  the  intention  of  the  assured  to  use  the  above  de- 
scribed building  to  store for  their  various  products,  and  this 

policy   shall    apply   only   to in   their   relation   to   the   other 

products  of  the  factory. 

It  is  understood  and  agreed  that  in  case  of  damage  by  fire,  or 
by  lightning,  the  assured  will  use  all  reasonable  means  to  replace 
or  repair  contents  and  to  reduce  the  loss  of  profits  to  a  minimum 
figure.  This  Company  shall  not  be  liable  for  any  greater  propor- 
tion of  the  loss  of  profits  than  this  insurance  bears  to  the  entire 
sura  of  the  profits  which  it  is  calculated  would  have  been  earned 
but  for  the  damage  caused  by  fire  or  by  lightning. 

It  is  part  of  the  consideration  for  which  this  policy  is  issued  that 
the  assured  hereby  covenants  and  agrees  to  keep  a  set  of  books 
of  account  showing  a  complete  record  of  business  transacted,  which 
shall  be  available  to  aid  in  the  determination  of  loss,  if  any, 
under  this  contract. 

By  lightning  is  meant  the  commonly  accepted  use  of  the  word, 
and  in  no  case  to  include  loss  or  damage  by  cyclone,  tornado  or 
windstorm.  If  there  is  any  other  similar  insurance  on  said  prop- 
erty this  Company  shall  be  liable  only  pro  rata  with  such  other 
insurance  for  loss  by  lightning  whether  such  other  insurance  be 
against  such  loss  or  not.  This  insurance  excludes  any  loss  or  dam- 
age to  motors  or  other  ele<:trical  appliances  or  devices,  such  as 
may  be  caused  by  electrical  currents,  artificial  or  natural,  and  will 
be  liable  only  for  such  loss  or  damage  to  them  as  may  occur  in 
consequence  of  fire  outside  of  the  machines  themselves. 

It  is  understood  and  agreed  that  this  insurance  shall  not  be  held 
as  contributing  with  any  other  form  of  insurance  on  the  plant,  nor 
hold  other  insurance  as  contributing  with  this. 

USE  AND  OCCUPANCY 

{Special) 

$125,000 — On  the  Use  and  Occupancy  of  the  assured's  reinforced 
concrete  dam  and  spillway  and  auxiliary  buildings  at  the  dam 
site,  together  with  the  pipe  line  extending  from  the  dam  site  to 
the  premises  of  the ;  all  situated 

The  conditions  of  this  contract  are  that  if  the  above  described 
dam,  spillway,  pipeline  or  any  of  its  constituent  parts,  or  ma- 
chinery or  supplies  or  material  in  or  on  the  premises  shall  be 
so  disabled,  damaged  or  destroyed  during  the  term  and  under  the 
conditions  of  this  policy,  that  the  assured  are  entirely  prevented 
from  conducting  their  business  from  said  property,  then  this  in- 
surance shall  be  liable  per  day  for  the  actual  loss  sustained  not 
exceeding  l/365th  part  of  the  amount  insured  hereunder  per  day 
for  each  working  day  of  such  prevention;  but  if  the  normal 
business  be  diminished  only,  then  this  insurance  shall  be  liable 
for  that  proportion  of  the  actual  loss  sustained  not  exceeding  said 


400  THE  AGENTS   KEY   TO  FIRE   INSURANCE 

per  diem,  in  which  such  business  is  diminished,  due  consideration 
being  given  to  the  amount  of  water  furnished  under  contract  before 
the  loss  and  the  probable  experience  thereafter,  but  under  no 
circumstances  shall  this  company  be  liable  in  the  aggregate  for 
more  than  the  per  diem  rate  nor  for  more  than  the  amount  of 
this  policy. 

A  period  of  twenty-four  (24)  hours  constitutes  the  "day"  referred 
to  in  this  policy. 

Loss,  if  any,  hereunder  to  be  computed  from  the  day  of  its 
occurrence  to  the  time  when  the  said  property  or  its  constituent 
parts  or  machinery,  or  supplies  could,  with  ordinary  diligence 
and  despatch,  be  restored  or  replaced  and  the  normal  average 
business  be  resumed.  Loss  not  to  be  limited  by  the  day  of  expira- 
tion  named   in  the  policy. 

It  is  a  condition  of  this  insurance  that  this  company  shall  not 
be  liable  for  loss  under  this  policy  except  as  a  result  of  actual 
physical  destruction,  disablement  or  damage  to  the  property  the 
use  and  occupancy  of  which  is  insured  hereunder,  and  then  only 
to  the  extent  that  such  physical  destruction,  disablement  or  damage 
shall  directly  affect  its  use  and  occupancy. 

Other   insurance   permitted  without  notice   until   requested. 
Inherent  Hazard  Clause 

This  policy  is  hereby  amended  to  include  all  direct  loss  or 
damage  caused  by  explosion  (excluding  fire  damage  resulting 
from  such  explosion)  originating  from  any  materials  or  processes 
incident  to  the  business,  of  the  assured  or  of  the  tenants  occupying 
the  buildings  or  premises  described  herein;  subject  in  every  respect, 
however,  to  all  the  limitations  and  conditions  of  this  policy. 

PROFITS  ON  MANUFACTURED  GOODS  IN 
WAREHOUSE 

{Illustration) 

$ On  profits  in  case  of  loss  of  goods  of  the  assured  unfinished, 

or  in  the  various  processes  of  finishing,  while  contained  in  the 
storehouses  of situate  at 

It  is  understood  and  agreed  that  this  policy  is  liable  for  and 
will  pay  on  any  loss  that  may  occur  on  said  goods  as  a  profit, 
a  sum  equal  to per  cent,  of  the  amount  of  specific  insur- 
ance paid  by  the  insurance  companies  on  said  goods  as  the  amount 
of  their  loss  but  in  no  case  more  than  the  amount  insured  herein. 

(Attach  full  Coinsurance  and  other  clauses.) 

PROFITS  INSURANCE 

{Illustration) 
On    profits    on   manufactured   goods,   while   contained   in    or    on 
their  buildings  and  premises  situate 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS   401 

It  is  the  purpose  of  this  insurance  to  indemnify  the  insured  for 
the  difference  in  value  between  the  cost  of  manufacture,  including 
all  fixed  charges  and  overhead  expenses,  and  the  list  price  of 
their  goods  at  the  time  of  any  fire,  less  the  maximum  trade  discount 
and  less  the  cost  of  labeling  and  casing  unlabeled  goods. 

(Attach  full  Coinsurance  and  other  clauses.) 

PROFITS  OR  COMMISSIONS  INSURANCE 

{Illustration) 

Upon  their  profits  on  sales  made  by  them  of  merchandise  and 
on  their  profits  to  be  made  on  merchandise  and  stock  while  con- 
tained on  their  premises  awaiting  order,  sale  or  manufacture,  all 
while  contained  in  the  buildings  and  additions,  situate 

It  is  understood  and  agreed  that  if  by  reason  of  loss  or  damage 
by  fire  on  the  above  mentioned  premises,  said  assured  shall  be  un- 
able to  fill  to  the  several  purchasers  such  orders,  previously  re- 
ceived, accepted  by  and  entered  upon  the  books  of  the  said  assured, 
as  have  not  at  date  of  fire  been  shipped  or  otherwise  delivered  or 
removed  according  to  such  orders,  then  this  Company  shall  be 
liable  to  the  assured  for  such  profits  as  they  would  have  derived 
had  such  orders  been  so  filled  or  delivered  or  removed,  which 
profits  shall  be  20  per  cent,  of  the  amount  of  any  order;  and  it  is 
also  understood  and  agreed  that  if  during  the  term  of  this  policy, 
the  stock  is  destroyed  or  damaged  by  fire,  then  this  Company  shall 
be  liable  for  loss  of  25  per  cent,  of  the  cost  value  of  said  stock, 
while  in  the  premises  of  the  assured,  awaiting  sale,  order  or 
manufacture,  such  25  per  cent,  of  the  cost  value  being  accepted  as 
the  profits  on  such  goods  had  they  been  manufactured  or  sold. 

(Add  usual  clauses.) 

PROFITS  AND/OR  COMMISSIONS  FORM 

{Illustration) 

$ On    Commissions    and/or    Profits    of    the    assured    and    of 

others  for  which  the  assured  may  be  liable  on  stock  of  mer- 
chandise, including  boxes  and  packages,  full  and  empty,  samples, 
labels,  designs,  materials  and  supplies,  the  property  of  the  assured 
or  held  by  the  assured  in  trust  or  on  commission,  or  on  storage, 
or  on  joint  account  with  others,  or  sold  but  not  delivered  or 
removed;  also  the  property  of  others  for  which  the  assured  may 
be    liable,    all    while    contained    in    the    building,    additions    and 

extensions,   situate ,   and  on   and   under  sidewalks   thereof, 

and  in  yards  and  on  streets  immediately  adjoining  the  above 
described  premises. 

It  is  agreed  that  "Commissions  and/or  Profits"  are  understood 
to  be  the  difference  between  the  assured's  selling  price  of  the 
above  described  merchandise  and  the  amount  they  are  obliged 
to  pay  their  consignors  for  the  same  and  that  if  all  or  any  part 


402  THE   AGENTS   KEY   TO    FIRE   INSURANCE  '] 

of  the  above  described  merchandise  is  damaged  or  destroyed  by  ' 
fire,  this  Company  shall  pay  to  the  assured  its  pro  rata  share  ! 
of  an  amount  equal  to  the  difference  between  the  amount  of  \ 
Commissions  and/or  Profits  on  the  merchandise  in  an  undamaged  i 
condition,  and  the  amount  of  Commission  and/or  Profits  actually  1 
received  by  the  assured  on  the  sale  of  any  salvage. 

It  is   agreed  that  the  words   "the  property  described"   and  "the 
actual  cash  value  of  said  property"  in  the  average  clause  attached     ; 
hereto,  are  to  be  interpreted  as  meaning  the  Commissions  and/or 
Profits  on   the  merchandise,   previously   referred  to. 

Attach  90%  Co-Insurance  Clause  and  add  usual  clauses.  i 

•j 

i 

PROFITS  AND/OR  COMMISSIONS  FORM  i 

{Illustration)  ] 

$ On   commissions   contingent   upon   the    shipment   of   canned     ; 

goods   from   the Canning   Company's  plant  situate i 

It  is  understood  and  agreed  that  if  by  reason  of  fire  occurring 
during  the   term   and  under   the  conditions   of  this  policy   in   any     j 
of  the  buildings  comprising  the  above  canning  plant  the  shipment 
of  goods  is  prevented,  the   liability  of  this   Company  for  loss  of 
commissions   shall   be  upon  the  following  conditions:  i 

(a)  For  the   estimated  loss  of  net  commission  upon  orders         i 
previously  received,  accepted  and  entered  on  the  books  of  the         I 

Canning  Company,  which  it  cannot  fill  by  reason  of         | 

said  fire,   such  commission  being %   of  the  net  amount  of         | 

such  orders.  ! 

(b)  For  the  estimated  loss  of  net  commissions  upon  goods 

unsold,  but  not  exceeding %   of  the   damage  sustained  by 

such  goods  as  determined  by  the  adjustment  of  the  loss  thereon 

(less   all   salvage   operations)    by   the  companies   insuring  such 
goods.  . 

(c)  For  the  estimated  loss  of  commissions  other  than  as  above        i 
described    which   would    normally   be    derived   from    the    sale         ' 

of  the  normal  product  of  the Canning  Company,  which         ; 

it   is   prevented   from   manufacturing   by   reason   of   said   fire,         j 

such  commissions  to  be  not  more   than %   of  the   net  sale         i 

price.  I 

It  is  also  understood  and  agreed  that  if  goods  can  be  procured 

at  some  other  point  to  fill  orders  which  would  otherwise  have  i 
been  filled  from  the  above  plant,  the  amount  of  commissions  ' 
earned  from  the  sale  of  such  other  goods  shall  be  deducted  from  j 
the  amount  which  under  the  terms  of  this  policy  would  otherwise  ; 
be  recoverable  by  the  assured.  I 

That  this  policy  shall  also  cover  use  and  occupancy  loss  j 
caused  by  lightning  (meaning  thereby  the  commonly  accepted  use  j 
of  the  term  lightning,  and  in  no  case  to  include  loss  or  damage  by  ] 
cyclone,   tornado,   or   windstorm),   not   exceeding  the   sum   insured     \ 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS    403 

nor  the  interest  of  the  insured  in  the  property.  Provided,  how- 
ever, that  if  there  shall  be  any  other  use  and  occupancy  insurance 
on  said  property,  this  Company  shall  be  liable  only  pro  rata  with 
such  other  insurance  for  any  use  and  occupancy  loss  by  lightning, 
whether  such  other  insurance  be  against  loss  by  lightning  or  not. 
(Attach  other  usual  clauses.) 

PROFITS  AND/OR  COMMISSIONS  FORM 

{Illustration.) 

($135,000)  On  their  Commissions  from  sales  of  merchandise  for 
account  of The  conditions  of  this  contract  of  insurance  be- 
ing, that 

If  by  Reason  of  Fire  on  the  premises  of  the  above-named  manu- 
facturing corporation,  the  production  and  consequently  the  delivery 
of  goods  to  the  assured  entirely  ceases,  this  policy  shall  be  liable 
to  pay   ($450)   dollars  per  day,  during  such  cessation;  and 

If  by  Reason  of  Fire  on  said  premises  such  product  partially 
ceases,  this  policy  shall  be  liable  to  pay  such  proportion  of  ($450) 
per  day  as  the  average  daily  deficit  in  value  of  the  product  of  said 
manufacturing  corporation  during  such  partial  cessation  bears  to 
($7,500),  which  shall  be  considered  the  value  of  the  average  daily 
product  preceding  said  fire. 

Loss  to  be  computed  from  the  day  of  the  occurrence  of  any  fire 
to  the  time  when  the  building  or  buildings  which  were  damaged 
or  destroyed  could,  with  ordinary  diligence  and  dispatch,  be 
repaired  or  rebuilt,  and  machinery  replaced  therein,  and  goods 
produced  and  finished  and  ready  for  shipment;  and  not  to  be 
limited  by  the  day  of  expiration  named  in  this  policy;  and  to 
include  the  loss  of  commissions  on  manufactured  goods  on  hand  in 
said  building  or  buildings  at  the  time  of  such  fire  and  destroyed 
or  damaged  thereby.  Said  commissions  to  be  computed  at  6  per 
cent,  of  the  sound  value  of  such  goods. 

(Add  usual  clauses.) 

PROFITS  AND/OR  COMMISSIONS  FORM 

{Illustration) 

$ On    profits    and/or    commissions    on   finished    merchandise, 

sold  or  unsold,  while  contained  in 

If  during  the  term  of  this  policy  such  merchandise,  or  any 
portion  thereof,  shall  be  destroyed  or  damaged  by  fire,  this  Com- 
pany shall  be  liable  for  its  pro  rata  share  of  any  loss  of  profits 
and/or  commissions  (to  be  ascertained  as  stated  below)  on  such 
merchandise  which  may  result  from  such  fire,  which  loss  shall 
not  exceed  the  percentage  of  damage  shown  by  the  final  outcome 
of  the  adjustment  of  the  loss  on  merchandise  by  companies  insuring 
same,  including  result  of  any  salvage  handling  operations  whether 
completed   before    or    after    such    adjustment;    or,    if   there   be    no 


404  THE   AGENTS    KEY    TO    FIRE   INSURANCE 

insurance  on  said  merchandise,  then  by  such  ascertainment  and 
estimate  by  the  parties  hereto  as  is  provided  for  in  the  printed 
portion  of  this  policy. 

Loss  of  profits  and/or  commissions  shall  not  exceed  the  per- 
centage of  loss  on  merchandise  as  finally  adjusted  nor  the  per- 
centage or  percentages  of  profits  and/or  commissions  that  would 
have  been  receivable  by  the  insured  on  the  date  of  the  fire  from 
the  sale  of  the  damaged  merchandise  in  the  ordinary  course  of 
the  insured's  business. 

Where  the  word  "property"  is  used  in  this  policy  or  clauses 
attached  hereto,  it  is  understood  to  mean  commissions  and/or 
profits  on  the  merchandise  described, 

(Attach  Co-insurance  and  other  usual  clauses.) 

Note: — Usually  written  at  the  stock  rate. 

PROFITS  AND/OR  COMMISSIONS  FORM 

$....0n  net  profits  and/or  net  commissions  on  merchandise, 
sold  or  unsold,  while  contained  in 

If  during  the  term  of  this  policy  the  said  merchandise,  or  any 
portion  thereof,  shall  be  destroyed  or  damaged  by  fire,  this  Com- 
pany shall  be  liable  for  its  pro  rata  share  of  any  ascertained  loss 
of  net  profits  and/or  net  commissions  on  said  merchandise  which 
may  result  from  such  fire,  not  exceeding  its  pro  rata  share  of  an 
amount  equal  to  the  net  profits  and/or  net  commissions  on  said 
merchandise  which  would  have  been  receivable  by  the  insured  if 
the  said  merchandise  had  been  sold  in  an  undamaged  condition 
on  the  date  of  the  fire  at  the  insured's  usual  rate  of  net  profits 
and/or   net   commissions. 

Where  the  word  "property"  is  used  in  this  policy  or  clauses 
attached  hereto,  it  is  understood  to  mean  net  commissions  and/or 
net  profits  on  the  merchandise  described. 

Co-Insurance  Clause. — It  is  a  part  of  the  consideration  of 
this  policy,  and  the  basis  upon  which  the  rate  of  premium  is  fixed, 
that  the  insured  shall  at  all  times  maintain  insurance  on  net 
profits  and/or  net  commissions  insured  by  this  policy  of  not  less 

than per    cent    of   the    net   profits    and/or   net   commissions 

which  would  have  been  earned  from  the  sale,  in  the  ordinary 
course  of  business,  of  the  entire  stock  on  hand  at  the  time  of  the 
fire,  and  that  failing  so  to  do  the  insured  shall  be  an  insurer 
to  the  extent  of  such  deficit,  and  in  that  event  shall  bear  his,  her 
or  their  proportion  of  the  loss. 

(Attach  other   usual   clauses.) 

NOTE:  Usually  written  at  double  the  stock  rate,  be- 
cause a  small  damage  to  merchandise  might  cause  a  claim 
for  total  loss  of  profits  or  commissions. 


USE  AND  OCCUPANCY,  PROFITS  AND  COMMISSIONS   405 

PROFITS  FORM 

{Contingent  on  loss  of  samples.) 

$ On  loss  of  profits  consequent  on  the  damage  or  destruc- 
tion by  fire,  occurring  during  the  term  or  under  the  conditions 
of  this  policy,  of  the  season's  samples  of  hats,  while  contained,  etc. 

It  is  hereby  understood  and  agreed  that  the  loss  of  profits 
referred  to  above  is  fixed  for  the  purpose  of  this  insurance  at  the 

rate  of  $ for  each  sample  hat  destroyed  or  so  damaged  by  fire 

as  to  be  unsuitable  for  the  purpose  intended. 

Attach    Lightning,    and    Coinsurance    clauses,    and    others, 

usual  or  required. 

PROFITS  OR  COMMISSIONS  FORM 

Note. — This  form  may  be  used  to  cover  a  retail  dealer  in  auto- 
mobiles against  loss  due  to  non-delivery  of  autos  because  of  fire 
causing  the  factory  where  they  are  made  to  suspend  production. 

$100,000  on  profits,  contingent  upon  the  delivery  of  automobiles 

by   the Company   of ,    to   the    assured   or   their 

customers  wherever  located  in  New  England. 

It  is  understood  and  agreed  that  the  conditions  of  this  insurance 
are  that  if  by  reason  of  fire  occurring  in  any  of  the  buildings  used 

for  manufacturing  purposes  by  the Company  of , 

which  prevents  the  assured  from  receiving  automobiles  for  any 
one   month   or   months,   or   any  part  thereof,   under   their   contract 

with  the  said Company,  then  this  company  shall  be  liable 

for  loss  of  profits  sustained  by  the  non-delivery  of  said  automobiles 
during  any  month,  months,  or  any  part  thereof  and  until  such  time 

as  the  said Company  of  ,  can  resume  production 

of  cars  according  to  its  contract,  and  not  to  be  limited  by  expiration 
of  policy,  said  loss  of  profits  to  be  based  at  the  rate  of  ten  per  cent. 
(10%)  of  the  catalog  list  price,  but  not  exceeding  the  amount  of 
this  policy. 

It  is  further  understood  and  agreed  that  after  any  fire  and  the 

resumption  of  manufacturing  by  the   Company  of 

the  furnishing  of  excess  delivery  of  cars  above  the  amount  speci- 
fied for  any  month  after  the  fire  shall  not  be  construed  as  filling 
the  contract  with  assured  for  any  month  or  any  part  thereof  during 
any  shut  down  caused  by  fire  and  previous  to  the  resumption  of 
manufacturing  by  said   Company. 

In  consideration  of  the  rate  at  which  this  policy  is  written  it  is 
expressly  stipulated  and  made  a  condition  of  this  contract  that 
this  company  shall  be  liable  for  no  greater  proportion  of  any  loss 
than  the  amount  hereby  insured  bears  to  the  actual  yearly  profits 
on  the  property  described  herein  at  the  time  when  said  loss  shall 
happen  based  on  the  300  working  days  immediately  preceding 
the  fire. 

(Add  usual  clauses.) 


106  THE   AGENTS    KEY   TO    FIRE   INSURANCE 

PROFITS  OR  COMMISSIONS  FORM 

Richard  Roe  and  Company 

$ On  their  profits  accruing  from  their  contracts  for  the  pur- 
chase of  the  output  of from  the  John  Doe  Co.,  at 

It  is  understood  that  the  estimated  output  of  said  factory  is 

yards  annually,  on  which  the  profit  to  the  insured  is  estimated 
and  fixed  for  the  purposes  of  this  insurance  at  $ per  yard. 

It  is  the  intention  of  this  insurance  to  indemnify  the  insured  for 
loss  of  profits  due  to  the  suspension  or  diminishing  of  the  output  of 

by   the  John   Doe   Co.    at   such   factory   directly   resulting 

from  the  destruction  of  or  damage  to  the  buildings  or  plant  of 
the  John  Doe  Co.  by  fire  and/or  lightning,  at  the  rate  of  l/300th 

of  the  amount  of  this  insurance,  being  $ per  day,  from  the 

time  of  the  suspension  or  diminishing  of  said  output  to  the  date 

when  normal  production  of may  with  reasonable  diligence 

be  resumed. 

Should  the  normal  production  be  diminished  only,  then  this  in- 
surance shall  be  liable  for  that  proportion  of  the  said  $ per 

day  in  which  said  production  is  diminished. 

It  is  understood  that  Richard  Roe  and  Co.  has  no  control  over 
the  factory  of  the  John  Doe  Co.,  and  that  said  factory  has  the 
privilege  of  working  at  such  hours  and  of  doing  such  work  and 
using  such  materials  as  may  be  deemed  necessary,  anything  in  the 
policy  to  the  contrary  notwithstanding. 

(Add  other  necessary  clauses.) 


DIVISION  XV 

EXCESS,   FLOATING   AND   GENERAL   COVER 
CONTRACTS 

These  terms  should  not  be  confused:  Floating  insurance 
may  be  excess  and  Excess  insurance  may  be  floating,  but  each 
may  be  one  without  the  other,  while  General  Cover  Contracts 
are  different  from  either. 

In  a  sense  all  insurance  is  floating  that  does  not  cover  on 
a  specific  article,  or  on  a  specific  and  fixed  piece  of  property. 

A  floating  insurance  policy,  as  the  term  is  gen- 
Floating  erally  used,  is  one  that  covers  the  subjects 
and  Excess       specified  wherever  they  may  be  within  certain 

prescribed  limits;  it  becomes  excess  insurance 
when  it  covers  values  (or  losses)  only  in  excess  of  stated 
amounts,  or  in  excess  of  some  other  stipulated  limit  or  limits. 
An  excess  insurance  policy  may  be  restricted  to  one  location, 
and  attach  only  on  a  single  subject.  As  a  rule  excess  insur- 
ance, whether  floating  or  applying  to  a  specific  location,  is 
not  liable  except  (a)  for  that  portion  of  a  loss  which  is  in 
excess  of  the  sum  of  any  specific  or  other  insurance  apply- 
ing, or  (b)  for  loss  in  excess  of  a  stated  amount.  For  ex- 
ample, a  concern  may  maintain  $1,000,000  specific  insurance 
and  in  addition  have  an  excess  policy  for  $200,000.  In  such 
case  the  excess  policy  is  liable  only  for  any  loss  that  exceeds 
$1,000,000. 

Where  excess  insurance  is  maintained,  the  specific  or  other 
insurance  policies  often  bear  a  clause  reading  somewhat  as 
follows : 

''Any  excess  insurance  covering  property  herein  de- 
scribed shall  not  be  held  as  contributing  insurance  with 
this  policy. ' ' 

An  excess  policy  covering  at  one  specific  location  often 
bears  a  clause  reading  somewhat  as  follows: 

**Any  floating  excess  insurance  Covering  property  de- 
scribed herein  shall  not  be  held  as  contributing  insur- 
ance with  this  policy." 

407 


408  THE   AGENTS    KEY   TO    FIRE   INSURANCE 

A  General  Cover  Contract,  while  it  may  provide  for  insur- 
ance anywhere  within  wide  limits,  is  not  floating  insurance, 

because  it  requires  that  insurance  shall  be  spe- 
General  cific  at  stated  locations  which  are  given  in  de- 

Cover  tail   in    the    statements    of    value    which    the 

Contracts         insured  must  render  under  the  terms  of  said 

agreement.  The  General  Cover  Contract  is  not 
a  policy  of  insurance,  but  rather  a  contract  to  insure  under 
specific  policies  to  be  written  in  accordance  with  rates  and 
rules  applying  where  the  property  is  located;  it  is  in  the 
nature  of  a  general  binder  for  a  stated  amount,  the  specific 
amounts  and  locations  making  up  the  aggregate  to  be  fur- 
nished at  a  stipulated  time. 

This  form  of  contract  to  insure  is  required  by  large  con- 
cerns having  property  in  many  different  localities,  usually 
•y^jjy  in  different  States,  where  the  values,  though 

Necessary  fairly  stable  in  the  aggregate,  fluctuate  so 
rapidly  as  between  the  various  locations  that 
it  makes  it  a  practical  impossibility  to  keep  covered  with 
separate  insurance  at  each  location.  With  constant  ship- 
ments to  and  from  widely  separated  locations  it  would  often 
happen  that  insurance  would  be  in  excess  of — or  less  than — 
the  actual  value  at  any  one  point,  and  in  the  latter  case  the 
insured  would  be  without  adequate  insurance  protection.  As 
a  rule.  General  Cover  Contracts  are  written  only  on  merchan- 
dise in  warehouses,  stores,  piers,  railway  terminals,  etc.,  and 
do  not  cover  in  any  manufacturing  plant  or  plant  warehouses. 

The  rules  governing  the  issuance  and  forms  of  General 
Cover  Contracts  have  not  as  yet  become  settled  practice,  and 
some  of  the  conditions  set  forth  in  the  sample  form  may  re- 
quire changing. 

The  theory  upon  which  increases  and  decreases  at  specific 
locations  are  permitted  at  pro  rata  rates,  providing  there  is 
no  change  in  the  aggregate  amount  of  insurance  (see  form),  is 
that  the  insurance  in  such  case  is  transferred,  thus  following 
the  usual  rule  whereby  it  is  permissible  to  cancel  insurance 
pro  rata  when  it  is  to  be  rewritten  as  of  the  same  date  in 
another  location;  but  if  the  aggregate  amount  is  diminished 
this  must  be  at  short  rates. 

Sample  forms  for  Moating  insurance  and  for  Excess  in- 
surance are  given  herewith ;  also  a  sample  of  a  General  Cover 
Contract : 


EXCESS,  FLOATING  AND  GENERAL  COVER  CONTRACTS   409 

FLOATER  FORM  (LIMITED) 

{Neiv   York   City) 

On  merchandise  consisting  principally  of excluding  cotton 

and  other  vegetable  fibre,  tobacco  and  its  products,  and  petroleum 
and  its  liquid  products,  the  property  of  the  assured,  or  held  by 
the  assured  in  trust  or  on  commission,  or  on  joint  account  with 
others,  or  sold  but  not  delivered,  while  contained  in  any  or  all 
of  the  brick,  stone  or  concrete  buildings  occupied  exclusively 
for  storage  purposes,  and  while  in  transit  in  or  on  any  of  the 
streets,  yards,  wharves,  piers  and  bulkheads,  in  any  of  the  Boroughs 
of  the  City  of  New  York,  or  in  the  Cities  of  Jersey  City  and 
Hoboken,  N.  J.,  and  while  afloat  in  transit  in  the  ports  of  said 
Cities;  subject  to  the  following  conditions  of  co-insurance  and 
to  the  exceptions  named  below: 

New  York  Standard  Average   Clause 

This  Company  shall  not  be  liable  for  a  greater  proportion  of 
any  loss  or  damage  to  the  property  described  herein  than  the 
sum  hereby  insured  bears  to  one  hundred  per  centum  (100%) 
of  the  actual  cash  value  of  said  property  at  the  time  such  loss 
shall  happen,  nor  for  more  than  the  proportion  which  this  policy 
bears  to  the  total  insurance  thereon. 

If  the  insurance  under  this  policy  be  divided  into  two  or  more 
items,   this   Average   Clause   shall    apply  to  each  item   separately. 

Exceptions. — This  policy  does  not  cover  any  property  which 
shall  at  the  time  of  any  fire  be  more  specifically  insured  by  this 
Company  or  any  other  insurer. 

This  policy  does  not  cover  on  the  piers  or  in  the  buildings  or 
premises  of  the  New  York  Central  &  Hudson  River  Railroad  Co., 
between  27th  and  33rd  Streets,  and  between  62nd  and  68th  Streets, 
New  York  City;  nor  on  the  piers  or  in  the  buildings  or  premises 
of  the  Erie  Railroad,  the  Central  Railroad  of  New  Jersey,  the 
Lehigh  Valley  Railroad,  the  Delaware,  Lackawanna  &  Western 
Railroad  and  the  Pennsylvania  Railroad,  in  Jersey  City  and 
Hoboken,  New  Jersey;  nor  in  any  grain  elevator  or  elevator 
store;  nor  in  any  furniture  storage  store;  nor  in  any  building 
occupied  in  whole  or  in  part  for  cold  storage  purposes  (i.  e., 
where  artificial  refrigeration  is  used)  ;  nor  in  any  building  occu- 
pied wholly  or  in  part  by  the  insured. 

Other  insurance  permitted  without  notice  until  required. 

EXCESS  FLOATER  FORM 

{Neiv  York  City) 
On  merchandise  consisting  principally  of excluding  cot- 
ton and  other  vegetable  fibre,  tobacco  and  its  products,  and 
petroleum  and  its  liquid  products,  the  property  of  the  insured, 
or  held  by  the  insured  in  trust  or  on  commission,  or  on  joint 
account  with  others,   or   sold   but  not  delivered,   while   contained 


410  THE   AGENTS    KEY   TO    FIRE   INSURANCE 

in  any  or  all  of  the  brick,  stone  or  concrete  buildings  occupied 
exclusively  for  storage  purposes,  and  while  in  transit  in  or  on 
any  of  the  streets,  yards,  wharves,  piers  and  bulkheads,  in  any 
of  the  Boroughs  of  the  City  of  New  York,  or  in  the  Cities  of 
Jersey  City  and  Hoboken,  N.  J.,  and  while  afloat  in  transit  in  the 
ports  of  said  Cities;  subject  to  the  following  conditions  of  co- 
insurance and  to  the  exceptions  named  below: 
(1)  New  York  Standard  Co-Insurance  Clause  for  Excess  Floating 
Policy. 

"If  any  property  included  in  the  terras  of  this  policy  shall  at 
the  time  of  any  loss  be  more  specifically  insured  by  this  company 
or  any  other  insurer,  this  policy  shall  extend  to  cover  such  prop- 
erty only  so  far  as  relates  to  any  excess  of  value  not  covered  by 
such  other  insurance,  whether  valid  or  not,  and  this  policy  shall 
be  liable  on  such  more  specifically  insured  property  only  for  such 
loss  as  shall  be  in  excess  of  the  amount  payable  by  or  recoverable 
from  such  more  specific  insurers,  whether  solvent  or  otherwise, 
but  in  no  event  shall  this  Company  under  this  policy  be  liable  for 
a  greater  proportion  of  any  loss  than  the   amount  of  this  policy 

shall    bear   to per   cent    ( %)    of  the   total   cash   value 

of    the    property    covered    by    this    policy    (including    such    excess 
value)    at  the  time  of  any  loss." 

Exceptions. — This  policy  does  not  cover  on  the  piers  or  in  the 
buildings  or  premises  of  the  New  York  Central  &  Hudson  River 
Railroad  Co.,  between  27th  and  33rd  Streets,  and  between  62nd  and 
68th  Streets,  New  York  City;  nor  on  the  piers  or  in  the  buildings 
or  premises  of  the  Erie  Railroad,  the  Central  Railroad  of  New 
Jersey,  the  Lehigh  Valley  Railroad,  the  Delaware,  Lackawanna 
&  Western  Railroad  and  the  Pennsylvania  Railroad,  in  Jersey  City 
and  Hoboken,  New  Jersey;  nor  in  any  grain  elevator  or  elevator 
store;  nor  in  any  furniture  storage  store;  nor  in  any  building 
occupied  in  whole  or  in  part  for  cold  storage  purposes  (i.  e., 
where  artificial  refrigeration  is  used)  ;  nor  in  any  building  occu- 
pied wholly  or  in  part  by  the  insured. 

Other  insurance  permitted  without  notice  until   required. 

EXCESS  FLOATER  FORM 

{Neiv   York   City) 

On  cotton  and  other  vegetable  fibre,  the  property  of  the  assured 
or  held  by  the  assured  in  trust  or  on  commission  or  on  joint  ac- 
count with  others  or  sold  but  not  delivered,  while  contained  in 
any  or  all  of  the  brick,  stone  or  concrete  buildings  occupied  exclu- 
sively for  storage  purposes,  and  while  in  transit  in  or  on  any  of 
the  streets,  yards,  wharves,  piers  and  bulkheads,  in  any  of  the 
Boroughs  of  the  City  of  New  York,  or  in  the  Cities  of  Jersey 
City  and  Hoboken,  N.  J.,  and  while  afloat  in  transit  In  the  ports 
of  said  cities;  subject  to  the  following  conditions  of  co-insurance 
and  to  the  exceptions  named  below: 

(Balance  of  this   form   is   the   same   as   the   foregoing.) 


EXCESS,  FLOATING  AND  GENERAL  COVER  CONTRACTS   411 

CLOTHING  FLOATER  FORM 

$ On  clothing  manufactured  and  in  process  and  all  materials 

and  supplies  used  in  the  making  or  repairing  thereof,  including 
labor  of  employees,  while  contained  in  the  dwellings,  shops  or 
rooms  of  tailors  and  their  employees,  being  made  up  for  the  trade 
of  the  insured,  situate  within  the  boundaries  of  the  City  of 

It  is  understood  and  agreed  that  this  policy  does  not  cover  direct 
or  indirect  loss  by  fire  in  the  main  manufacturing  premises  of  the 

insured,  situate ;  that  in  case  of  specific  insurance  on  any 

property  covered  by  this  policy,  this  Company  shall  not  be  liable 
unless  and  until  the  amount  of  loss  exceeds  the  said  specific  insur- 
ance, and  then  for  the  excess  amount  only;  that  this  policy  shall  not 
be  invalidated  by  any  act  or  neglect  of  any  occupant  of  the  build- 
ings containing  the  property  insured;  that  permission  is  given  to 
keep  and  use  such  materials  and  supplies  as  are  necessary,  for 
other  insurance,  and  to  make  additions,  alterations  and  repairs. 

(Add  other  usual  or  required  clauses,  including  Coinsurance.) 

CLOTHING  FLOATER  FORM 

$ On  clothing  manufactured  and  in  process  and  all  materials 

and  supplies  used  in  the  making  or  repairing  thereof,  including 
labor  of  employees,  while  contained  in  the  dwellings,  shops  or 
rooms  of  the  tailors  and  their  employees,  being  made  up  for  the 
trade  of  the  insured,  situate  within  the  boundaries  of  the  City  of 


It  is  understood  that  the  liability  of  this  Company  under  this 
policy  is  limited  in  any  one  building,  or  by  any  one  fire,  to  ten 
per  cent.  (10%)  of  the  amount  hereby  insured.  In  the  event  of  a 
conflagration,  or  the  burning  of  two  or  more  buildings,  it  is  under- 
stood that  for  the  purpose  of  this  insurance  the  burning  of  each 
separate  building  will  be  considered  a  separate  fire,  and  subject 
the  Company  to  its  corresponding  liability.  In  case  of  specific  in- 
surance on  any  property  covered  by  this  policy,  this  Company  shall 
not  be  liable  unless  and  until  the  amount  of  loss  exceeds  the  said 
specific  insurance,  and  then  for  not  to  exceed  ten  per  cent.  (10%) 
of  this  policy. 

It  is  understood  and  agreed  that  this  policy  shall  not  be  in- 
validated by  any  act  or  neglect  of  any  other  occupant  of  the  build- 
ings containing  the  property  insured. 

(Add  usual  or  required  clauses,  including  coinsurance.) 

Note: — The  following  condition  is  sometimes  included  in  the 
clothing  floater  forms: 

"It  is  also  expressly  agreed  and  understood  that  if  any  part 
or  portion  of  any  suit  manufactured  or  partly  manufactured  or 
in  process  of  manufacture,  or  any  materials  manufactured  or 
unmanufactured,  or  in  process  of  manufacture,  intended  to  form 
part   of    an   entire   suit   shall    be   destroyed   or    damaged   and   the 


412                THE   AGENTS    KEY   TO    FIRE   INSURANCE  ] 

I 
1 

assured  cannot  in  the   open  market  obtain  materials  for  the  pur-  ] 

pose   of   repairing   or   replacing  the   part   or   portion   so   damaged  j 

or  destroyed  then   and  in  that  event,  this  company  shall   pay  the  j 

actual   cost  of  entire  suit,  upon  surrender   to  the  company  of  the  1 

undamaged  portions  thereof,  manufactured  or  unmanufactured  or  j 

in    any   process   or   manufacture,    and   the    assured   warrants   that  ., 

he   will    first    endeavor   to   repair    such    portion    damaged   or    de-  \ 

stroyed,    if    it    be    possible    to    do    so    with    reasonable    diligence,  | 

within  fifteen   days   from  the  date   of  such  fire   or  fires   and   this  i 

clause   shall    apply   whether   such  suit  shall    be   located  or   be   in  \ 

process    of    manufacture    in    one    place    or    in    different    portions  } 

thereof  in  different  places."  j 

1 

MANUFACTURING   FLOATER   FORM  ' 

On and  on  goods  and  materials  for  making  same,  finished  j 

and  unfinished,  the  property  of  the  assured,  or  held  by  the  assured  j 

in  trust,  while  in  possession  of  other  parties  to  be  made  up,  and  j 

while  contained  in  any  building  in excepting  any  place  or  | 

building  used  for  a  prison  or  penal  institution,  and  excepting  in  any  : 
building  occupied  in  whole  or  in  part  by  the  assured. 

This  policy  does  not  apply  to  or  cover  in  any  premises  where  ; 

the   above  goods  or  materials   are   sent  for  the  purpose  of  being  ; 

cleaned,   sponged,   dyed,   shrunk   or   refinished;    nor  while   in   any  ' 

express  office  or  depot,  nor  while  in  charge  of  any  express  or  rail-  : 

road  company  or  other  common  carrier.  ! 

It  is  further  expressly  understood  and  agreed  that  this  insurance  ; 

shall  not  cover  on  any  lot  or  parcel  of  goods  which  shall  be  more  j 

specifically  or  definitely  located  or  described  in  any  other  insurance  ■ 

in  this  Company,  or  in  any  other  Company  or  Association,  except-  \ 

ing  on  the  excess  of  value  of  such  property  over  and  above  such  ; 

specific  insurance,  and  this  Company  shall  only  be  liable  on  such  -, 

specifically  insured  property  for  its  share  of  such  loss,  after  all  j 

such  specific  insurance  is  exhausted.  \ 

Also  that  wherever  this   insurance  may  cover,   not  more   than  ; 

$...,    (10  per  cent,  of  the  face  of  the  policy)  shall  apply  or  cover  i 

in  any  one  building,  and  in  no  event  shall  this  Company  be  liable  ; 

for  any  greater  proportion  of  any  loss  than  the  amount  insured  j 

bears  to  the  actual  cash  value  of  all  the  property  covered  by  this  '■ 

policy.  ' 

Other  insurance  permitted  without  notice  until  required.  ! 

1 
THEATRICAL  FLOATER 

$ On    personal    effects,    theatrical    costumes    and    equipments  ■ 

(except  money,  bullion,  deeds,  evidences  of  debt  and  securities  of  I 

any  kind,  manuscripts,   merchandise,   automobiles  or  motor  cycles  ! 

of  any  kind),  the  property  of  the  assured  and  family  and  servants  I 

accompanying  assured  or  family  wherever  they  may  be,  or  while  j 


EXCESS,  FLOATINQ  AND  GENERAL  COVER  CONTRACTS   413 

being  transported   by   train,   boat,   or  conveyance   of   any  kind,   in 
the  United  States  of  America  or  Canada. 

It  is  understood  and  agreed  that  this  policy  does  not  cover  in 
any  place  where  the  assured  has  specific  insurance  on  the  above 
described  property,  or  while  in  the  residence  of  the  assured. 

It  is  understood  that  if,  in  case  of  loss,  and  by  reason  of  such 
loss,  the  assured  shall  acquire  a  right  of  action  against  any 
individual,  firm  or  corporation  for  damage  to  the  property  above 
described,  assured  will  sign  and  transfer  such  claim  to  this  com- 
pany upon  receiving  payment  for  loss  from  this  company,  and 
subrogate  this  company  to  all  assured's  rights  and  demands  of 
every  kind  respecting  the  same,  and  permit  suit  to  be  brought  in 
assured's  name,  but  at  this  company's  risk  and  expense. 

In  case  the  property  above  described  shall  be  in  different  places, 
this  policy  covers  at  each  place  that  proportion  of  the  whole  amount 
of  this  policy  that  the  value  of  the  property  in  each  place  bears 
to  the  value  of  all. 

But  it  is  at  the  same  time  declared  and  agreed  that  if  any  prop- 
erty included  in  the  terms  of  this  policy  shall  at  the  time  of  any 
fire  be  insured  in  any  Marine  Insurance  Company,  this  policy  shall 
not  extend  to  cover  the  same,  excepting  only  as  far  as  relates  to  any 
excess  of  value  beyond  the  amount  of  such  Marine  insurance  or  in- 
surances, and  shall  not  be  liable  for  any  loss  unless  the  amount 
of  such  loss  shall  exceed  the  amount  of  such  Marine  insurance  or 
insurances,  which  said  excess  only  is  declared  to  be  under  the  pro- 
tection of  this  policy.  It  being  the  true  intent  and  meaning  of  this 
agreement  that  this  Company  shall  not  be  liable  for  any  loss,  un- 
less the  amount  of  such  loss  shall  exceed  the  amount  of  the  Marine 
insurance  or  insurances,  and  then  only  for  such  excess. 

This  policy  shall  cover  any  direct  loss  or  damage  caused  by 
lightning  (meaning  thereby  the  commonly  accepted  use  of  the  term 
lightning,  and  in  no  case  to  include  loss  or  damage  by  cyclone, 
tornado  or  wind-storm),  not  exceeding  the  sum  insured,  nor  the  in- 
terest of  the  assured  in  the  property,  and  subject  in  all  other  re- 
spects to  the  terms  and  conditions  of  this  policy.  Provided,  how- 
ever, if  there  shall  be  any  other  insurance  on  said  property,  this 
Company  shall  be  liable  only  pro  rata  with  such  other  insurance 
for  any  direct  loss  by  lightning,  whether  such  other  insurance  be 
against  direct  joss  by  lightning  or  not. 

THEATRICAL  FLOATER  FORM 

{Attached  to  Inland  Marine  Policy) 
On   Scenery,   Costumes   and  Theatrical  Properties   of   every   de- 
scription  used   in   the   production    of   the   Play   known    as 

(warranted    only    one    company    of    that    name)     against    loss    or 
damage  caused  by  fire,   collision  or   derailment,   to   an   aggregate 

amount  in  all  places  of dollars  while  in  transit  by,  or  in 

the    custody    of,    any    Railroad,    Express,    Transfer    and/or    other 
Transportation    Company,    while    on    land,    and    against    Marine 


414  THE   AGENTS    KEY   TO    FIRE   INSURANCE 

perils  while  on  Ferries,  and/or  in  cars  on  Transfers  in  con- 
nection therewith,  and  against  fire  while  contained  in  any  business 
or  theatrical  building. 

Also  risks  against  above-mentioned  perils  while  on  Docks, 
Wharves,  Piers  and/or  Bulkheads,  and/or  Depots,  Stations  and/or 
on  Platforms,   incidental   to  transportation. 

This   Policy  to   attach   and   cover  from   noon   of 19 , 

to   noon    of 19 ,    standard    time    at  place    of   insurance. 

Subject  to  terms   and  conditions   on  back  of   application. 

Applicant. 

Approved 

19.... 

LAUNDRY  FLOATER  (PERSONAL) 

iS.  E.  U.  A.) 

$ On  the  used  personal  property  of  assured  and  family  while 

temporarily  removed  from  the  place  where  it  is  ordinarily  kept  to 
any  building  or  premises  occupied  for  laundry  or  dry  cleaning 
purposes,  located  in 

This  policy  does  not  cover  or  attach  in  or  on  the  premises  of  the 
assured. 

It  is  hereby  stipulated  that  in  case  the  property  covered  hereun- 
der is  in  more  than  one  place,  this  policy  is  to  attach  in  each  loca- 
tion in  proportion  as  the  value  in  each  bears  to  the  value  in  all. 

This  policy  shall  cover  any  direct  loss  or  damage  caused  by 
lightning  (meaning  thereby  the  commonly  accepted  use  of  the  term 
lightning,  and  in  no  case  to  include  loss  or  damage  by  cyclone, 
tornado  or  wind-storm)  not  exceeding  the  sum  insured,  nor  the 
interest  of  the  insured  in  the  property,  and  subject  in  all  other 
respects  to  the  terms  and  conditions  of  this  policy.  Provided,  how- 
ever, if  there  shall  be  any  other  insurance  on  said  property,  this 
Company  shall  be  liable  only  pro  rata  with  such  other  insurance 
for  any  direct  loss  by  lightning,  whether  such  other  insurance  be 
against  direct  loss  by  lightning  or  not. 

It  is  a  part  of  the  consideration  of  this  policy,  and  the  basis  upon 
which  the  rate  of  premium  is  fixed,  that  the  assured  shall  at  all 
times  maintain  insurance  on  each  item  of  property  insured  by  this 
policy  of  not  less  than  seventy-five  per  cent,  of  the  actual  cash 
value  thereof,  and  that,  failing  so  to  do,  the  assured  shall  be  an 
insurer  to  the  extent  of  such  deficit,  and  in  that  event  shall  bear 
his,  her  or  their  proportion  of  any  loss. 

But  it  is  at  the  same  time  declared  and  agreed  that  if  any 
specific  property  described  above,  included  in  the  terms  of  this 
policy,  shall,  at  the  time  of  any  fire,  be  insured  in  this  or  any  other 
company,  this  policy  shall  not  extend  to  cover  the  same,  excepting 
only  as  far  as  relates  to  any  excess  of  value  beyond  the  amount 
of  such  specific  insurance,   and   shall    not  be   liable   for   any   loss 


EXCESS,  FLOATING  AND  GENERAL  COVER  CONTRACTS   415 

unless  the  amount  of  such  loss  shall  exceed  the  amount  of  such 
specific  insurance  (disregarding  the  liability  of  the  assured  as  an 
insurer  under  any  coinsurance  clause,  under  such  specific  insurance), 
which  said  excess  only  is  declared  to  be  under  the  protection  of 
this  policy  and  gubject  to  average  aforesaid. 
Other  concurrent  insurance  permitted. 

EXCESS  INSURANCE  FORM 

{Illustration) 

$....0n  stock  consisting  principally  of while   contained 

in  the building  and  additions  adjoining  and  communicat- 
ing, situate 

It  is  hereby  understood  and  agreed: 

That  the  insured  shall  maintain  $ specific  insurance  on 

the  above  described  stock;  that  this  insurance  shall  not  be  liable 

for  any  loss  except  for  that  portion  in  excess  of  said  $ ,  and 

then  only  in  the  proportion  that  the  total  amount  of  the  insurance 
under  this  policy  shall  bear  to  the  excess  of  the  value  of  stock 
over  the  said  $. 

(Attach  usual  clauses.) 

EXCESS  INSURANCE  FORM 

{Illustration) 

$ On  the  building  and  additions  adjoining  and  communicat- 
ing, and  on  all  contents  thereof,  (including  property  specifically 
enumerated  in  the  policy  on  which  liability  is  required  to  be  spe- 
cifically assumed,  but  excluding  accounts,  bills,  currency,  deeds,  evi- 
dences of  debt,  money,  notes,  or  securities),  belonging  to  the  in» 
sured,  or  in  which  the  insured  has  an  interest  to  the  extent  of  such 
interest,  or  for  which  the  insured  may  be  liable  at  the  time  of 
fire,  occupied  principally  for purposes,   situate 

It  is  understood  and  agreed  that  this  insurance  shall  not  be 
prejudiced  by  the  fact  that  any  of  the  property  herein  insured 
is  located  on  land  to  which  the  assured  has  not  title  in  fee  simple, 
it  being  the  intention  that  the  insurance  covers  on  any  and  all 
buildings  and  property  as  specified  herein  that  are  located  on  land 
for  which  assured  holds  lease,  easement,  right  of  way  or  any 
other  title;  and  also  covers  in  cases  where  as  yet  no  title  has  been 
acquired.  It  is  further  understood  and  agreed  that  any  error  in 
description,  location,  situation,  occupation  or  non-occupation  of  any 
building  or  other  property  named  herein  shall  not  operate  to  the 
prejudice  of  the  insured. 

Other  insurance  permitted  without  notice  until   required. 

It  is  understood  and  agreed  that  this  insurance  does  not  cover 
cost  of  excavations  and  foundations  of  buildings  below  the  level  of 
the  ground. 


41()  THE    AGENTS    KEY    TO    FIRE    INSURANCE 

It  is  understood  and  agreed  that  above  property  may  be  occu- 
pied or  used  for  such  purposes  as  the  interest  of  the  assured  may 
require  with  the  customs  and  hazards  incident  thereto  and  may 
be  unoccupied  during  the  customary  season. 

Permission  for  mechanics  and  others  to  work  on  the  premises  day 
and  night,  and  to  make  ordinary  additions,  alterations  and  repairs 
but  this  shall  not  be  held  to  include  the  constructing  or  recon- 
structing of  the  building  or  buildings  or  the  erection  of  an  addi- 
tion or  the  enlargement  of  the  premises. 

All  the  foregoing  provisions  to  be  held  binding  as  special  agree- 
ments, anything  in  this  policy  contained  as  to  storage  or  occupancy, 
use  of  property,  or  as  to  its  hazardous  or  extra  hazardous  charac- 
ter or  otherwise  to  the  contrary  notwithstanding. 

Electric  Light  Clause  and  Lightning  Clause  attached. 

It  is  understood  and  agreed  that  this  insurance  shall  not  attach 
and  that  no  claim  shall  be  made  hereunder  unless  the  loss  on  the 
property  above  described,  by  or  in  consequence  of  any  one  fire  ex- 
ceeds $100,000  and  then  this  insurance  shall  be  liable  only  for  its 
proportion  of  loss  in  excess  of  said  $100,000. 

This  Company  shall  not  be  liable  for  a  greater  proportion  of 
any  loss  or  damage  to  the  property  described  herein  than  the  sum 
hereby  insured  bears  to  ninety  (90%)  percentum  of  the  actual  cash 
value  of  said  property  at  the  time  such  loss  shall  happen. 

NOTE :  The  following  form,  was  used  to  protect  a  tele- 
phone company  against  loss  on  telephone  apparatus  in  hand? 
of  subscribers  scattered  throughout  a  given  city. 


TELEPHONE  COMPANY  FLOATER 

Telephone  Company. 

$....0n  the  telephones,  telephone  instruments,  switchboards, 
exchanges,  wires,  cables,  operating  tables  and  attachments  and 
all  other  equipment  and  paraphernalia  and  furniture  and  fixtures 
pertaining  thereto,  while  contained  in  or  on,   or  attached   to   any 

building   or   buildings    in   the   corporate    limits   of ,    except 

the  premises  of  the  insured  occupied  by  them  for  Central  Office 
Telephone  Exchanges  and  supply  warehouses  and  property  upon 
which  they  have  specific  insurance,  covering  such  property  against 
the  same  hazard. 

In  consideration  of  the  rate  and/or  form  under  which  this 
contract  is  written,  it  is  expressly  understood  and  agreed  that 
the  insured  shall  not  make  claim  for  any  loss  less  than  $.,.. 
in  amount  nor  shall  this  Company  be  liable  for  more  than  its 
pro  rata  proportion  of  $.  ..  .in  any  one  building,  or  communicating 
building  not  separated  by  fire  walls  or  standard  cut  off. 

In  case  of  loss  or  damage  the  insured  shall  give  this  Company 
notice    thereof    without    delay,    but    may    make    immediately    all 


EXCESS,  FLOATING  AND  GENERAL  COVER  CONTRACTS   417 

necessary   repairs,   and  shall   not  be   required   to  furnish  proofs  of 
loss  until  such   repairs  have  been  completed. 
(Attach  coinsurance  and  other  usual  clauses.) 

NOTE:  This  form  was  used  to  protect  a  gas  company 
against  loss,  due  to  explosion  of  any  of  its  meters,  in  case 
it  was  held  liable  for  ensuing  damage. 

GAS  COMPANY  LEGAL  LIABILITY 

On  its  legal  liability  for  damage  to  property  wherein  gas  is 
served  by  the  insured  located 

This  policy  does  not  cover  damage  to  city  or  other  public  prop- 
erty, or  to  public  streets,  highways  and  pavements,  or  to  property 
in,  on  or  under  streets,  highways  and  pavements. 

It  is  understood  and  agreed  that  this  legal  liability  insurance 
does  not  apply  to  any  properties  occupied  by  the  insured. 

Anything  in  the  printed  conditions  of  this  policy  to  the  con- 
trary notwithstanding,  liability  hereunder  is  limited  to  direct  loss 
or  damage  to  property  by  explosion  of  natural  gas  served  by 
the  insured  for  a  consideration  in  said  city;  but  damage  by 
fire   is  not  covered  whether   resulting  from  such  explosion  or  not. 

The  liability  of  this  company  in  any  one  loss  is  hereby  limited 
to 

It  is  hereby  warranted  by  the  assured  that  there  were  twenty- 
three  thousand  meters  in  use  as  shown  by  its  books  at  the  time 
this  policy  was  issued  and  it  is  a  condition  of  this  insurance 
that  if  the  number  of  meters  increase  in  an  amount  exceeding  10% 
of  the  original  total,  then  in  event  of  loss  this  insurance  shall 
not  be  liable  for  an  amount  greater  than  the  original  number  of 
meters  insured  bears  to  90%  of  the  total  number  of  meters  in 
use  at  the  time  of  loss. 

It  is  a  condition  of  this  contract  that  the  insured  shall  give 
immediate  notice  of  any  claim  for  damage  to  property  served 
by  it,  and  that  the  insured  shall  immediately  forward  to  the 
company's  home  office  copies  of  every  summons  or  other  process 
as  soon  as  same  is  served.     No  expenses  of  adjustments,  attorneys' 

fees,  or  legal  expenses  of  any  nature  shall  be  charged  to 

Insurance  Company  without  its  knowledge  and  consent. 

GENERAL  COVER  CONTRACT 

{Illustration) 
In  consideration  of  one  dollar    ($1)    and  further  considerations 
under  the  terms,  conditions  and  stipulations  hereinafter  mentioned 

does    insure for    the   term    of    one    year    from   the 

day  of 19 ,  at  noon,  to  the day  of 19 , 

at   noon,   against   all   direct  loss  or   damage  by  fire   or   lightning, 
to   an    amount   not  exceeding per   cent.    (%)    of  the   value 


418  THE   AGENTS    KEY   TO    FIRE   INSURANCE 

of  the  property  as  shown  by  the  statements  of  values  rendered 
by  the  insured  as  herein  provided  to  the  following  described 
property  while  located  and  contained  as  follows  and  not  elsewhere, 
to-wit: 

At  any  place  or  places  throughout  the  United  States  of  America, 
excluding  the  State  of  Michigan  and  the  City  of  Greater  New 
York,  N.  Y.,  as  reported  to  and  specifically  described  in  a  list 
furnished  by  the  insured  on  the  date  of  the  signing  of  this  contract, 
filed  in  the  office  of  this  company,  and  forming  a  part  of  this 
contract. 

It  is  the  intent  of  this  contract  to  protect  the  interest  of  the 
insured  to  the  extent  as  herein  provided,  upon  property  as  above 
described,  in  the  buildings  and  on  the  premises  specifically  de- 
scribed in  the  list  referred  to  in  the  preceding  paragraph,  pending 
the  issue  of  policies  by  duly  authorized  and  commissioned  resident 
agents  of  this  company,  according  to  the  following  terms,  condi- 
tions and  limitations. 

It  is  understood  and  agreed  that  no  claim  for  loss  in  any  one 

location  shall  be  made  hereunder  for  any  greater  sum  than 

per  cent.   ( %)   of  $ 

This  contract  is  issued  as  a  special  agreement  with  the  insured, 
who  covenants  and  agrees  to  keep  a  set  of  books  showing  a  com- 
plete record  of  the  value  of  the  merchandise  as  above  described, 
and  on  the  day  of  the  signing  of  this  contract,  to  furnish  this  com- 
pany with  a  statement  showing  the  value  on  that  date  of  the  mer- 
chandise above  described,  and  the  amount  of  any  other  or  additional 
fire  insurance  covering  the  property,  contained  in  the  buildings 
and  on  the  premises  enumerated  in  the  list  filed  as  previously 
provided. 

Upon  receipt  of  such  data  policies  for  amounts  equaling  the 
liability  at  each  location  as  shown  by  such  statements  are  to  be 
issued  at  the  various  agencies  of  this  company,  in  conformity 
with  the  laws  of  the  respective  states,  and  the  policies  are  to  be 
filed  in  the  office  of  this  company  as  a  part  of  this  contract. 
Premium  shown  by  the  policies  so  issued  shall  constitute  a 
further  consideration  under  this  contract. 

On   the day   of   each  month   following   the   date   of   the 

commencement  of  the  term  of  this  contract,  the  insured  agrees  to 
furnish  this  company  with  a  statement  showing  the  value  on 
that  day  of  the  merchandise  above  described  and  the  amount  of 
any  other  or  additional  fire  insurance,  covering  the  within  de- 
scribed property,  contained  in  each  one  of  the  locations  enumerated 
in  the  list  filed  as  above  provided. 

At  such  stated  periods  any  new  locations  may  be  added  to  the 
list,  and  this  contract  shall  include  and  attach  at  these  points 
in    the   same   manner    as    at  the   locations   previously   enumerated. 

Upon  receipt  of  such  advices  the  amount  of  insurance  under 
this  contract   shall    be   increased  or   reduced   to   an   amount  equal 


EXCESS,  FLOATING  AND  GENERAL  COVER  CONTRACTS   419 

to  the  value  of  the  merchandise  on  that  day  after  deducting  all 
other  fire  insurance  as  shown  by  such  statements,  and  policies 
are  to  be  issued  as  previously  provided,  or  endorsed  to  such 
amounts  as  are  shown  by  the  statements  to  be  the  amount  of 
insurance  under  thi^  contract,  at  each  location  enumerated  in 
the  list  of  locations  filed  by  the  insured  as  called  for  under 
the  terms  and  conditions  of  this  contract. 

Such  changes  are  to  be  made  in  accordance  with  the  rules 
and   regulations   locally   applying. 

It  is  understood  and  agreed  that  should  any  of  the  within 
described  property  at  the  locations  contained  in  the  list  as  pre- 
viously provided  be  damaged  or  destroyed  by  fire  between  the 
dates  provided  for  the  reporting  of  values  by  the  insured,  this 
Company   agrees   that  this   contract   shall    attach   to   the   extent  of 

not    exceeding ...per    cent.     ( %)     of    the    value    of    the 

property  at  each  location  as  shown  by  the  books  of  the  insured 
at  the  time  of  the  fire,  after  deducting  all  other  fire  insurance 
covering  the  property,  but  is  further  understood  and  agreed  that 
no  claim   for   loss   in    any  location   shall    be   made   hereunder   for 

any  greater   sum  than per   cent.    (....%)    of  the  limit  of 

liability  noted  herein. 

If  during  the  term  of  this  contract  the  insured  shall  acquire 
any  property  as  described  above,  not  already  included  in  the 
list  of  locations  filed  with  the  companiies  at  the  date  of  the  com- 
mencement of  the  term  of  this  contract,  as  herein  provided,  this 
contract    shall    automatically    apply    and    cover    at   such    point   or 

points   to   an   amount  not   exceeding per  cent.    (....%)    of 

Dollars     ($....)     in    any    one    building,    until    the    new 

location  or  locations  are  reported  in  the  next  monthly  list  of 
values,  to  be  rendered  by  the  insured  as  herein  stipulated.  It 
is  understood  and  agreed,  however,  that  the  above  does  not  apply 
to  any  location  or  locations  in  the  State  of  Michigan  and  the 
City  of  Greater  New  York,  N.  Y.,  which  is  excluded  from  all 
coverage  under  this  contract. 

Provided  that  at  the  date  of  the  rendering  of  the  last  preceding 
monthly  statement  of  values  by  the  insured,  he  or  they  had  no 
interest  in  or  responsibility  for  such  property,  and  that  at  the 
time  such  automatic  cover  was  assumed  as  above,  the  property 
had  not  been  affected  or  threatened  by  fire. 

This  insurance  to  be  subject  to  the  printed  conditions  of  the 
forms  of  policies  issued  by  agents  of  this  company  as  herein 
provided,  the  New  York  Standard  form  of  policy  in  such  states 
where  this  form  is  prescribed  for  use  or  required  by  law,  and 
the  Standard  form  of  policy  required  by  law  in  states  where 
this  form  is  not  permitted. 

It  is  understood  and  agreed  that  the  word  "noon"  as  used  in 
this   contract   is   intended   to   mean   "noon"    standard   time,    at   the 


420  THE   AGENTS    KEY   TO    FIRE   INSURANCE 

place   where   the  property  which   is   the   subject  of  this   insurance 
is  situated. 

Reduced  Rate  Contribution  Clause 
In  consideration  of  the  reduced  rate  and/or  form  under  which 
this  contract  is  issued,  it  is  expressly  stipulated  and  made  a 
condition  of  this  contract  that  in  the  event  of  loss  this  Company 
shall  be  liable  for  no  greater  proportion  thereof  than  the  amount 
hereby  insured  bears  to  One  Hundred  Per  Cent.  (100%)  of  the 
actual  value  of  the  property  described  herein,  at  the  time  when 
such  loss  shall  happen,  nor  for  more  than  the  proportion  which 
this  contract  bears  to  the  total  insurance  thereon. 

In  the  event  that  the  aggregate  claim  for  any  loss  is  both 
less  than  Ten  Thousand  Dollars  ($10,000)  and  less  than  Five 
Per  Cent.  (5%)  of  the  amount  of  insurance  upon  the  property 
at  the  location  where  and  at  the  time  such  loss  occurs,  no  special 
inventory  or  appraisement  of  the  undamaged  property  shall  be 
required. 

The  foregoing  conditions  shall  apply  separately  in  each  location 
at  which  this  contract  covers. 

Lightning  Clause 

This  contract  shall  cover  any  direct  loss  or  damage  caused  by 
lightning  (meaning  thereby  the  commonly  accepted  use  of  the 
term  lightning,  and  in  no  case  to  include  loss  or  damage  by 
cyclone,  tornado  or  windstorm),  not  exceeding  the  sum  insured  nor 
the  interest  of  the  insured  in  the  property  and  subject  in  all 
o*her  respects  to  the  terms  and  conditions  of  this  policy.  Pro- 
vided, however,  if  there  shall  be  any  other  insurance  on  said 
property  this  company  shall  be  liable  only  pro  rata  with  such 
other  insurance  for  any  direct  loss  by  lightning,  whether  such 
other  insurance  be  against  direct  loss  by  lightning  or  not. 

This  contract  shall  be  canceled  at  any  time  at  the  request 
of  the  assured ;  or  by  the  Company  by  giving  fifteen  days'  notice 
of  such  cancellation,  which  notice  shall  terminate  all  insurance 
thereunder. 

It  is  understood  and  agreed  that  the  insured  shall  be  indemnified 
for  not  more  than  that  proportion  of  the  loss  which  the  last 
reported  value  of  stock  bore  to  the  actual  value  of  stock  at  the 
time  of  such  last  report,  and  in  no  event  for  more  than  the 
actual  loss. 


DIVISION  XVI 
MISCELLANEOUS  FORMS 

Herein  are  included  various  unclassified  forms  which  may 
prove  of  value.  This  list  might  be  extended  almost  indefi- 
nitely, for  there  are  a  very  large  number  of  special  condi- 
tions which  require  forms  drawn  to  provide  the  specific  cover 
necessary.  This  is  particularly  true  of  those  forms  that 
cover  contingent  liabilities,  but  these  vary  so  greatly  as  to 
make  any  one  form  of  little  value. 

.BUILDER'S  RISK— OWNER'S  FORM 

{Contractor's  interest  not  covered) 

$ On  the  interest  of  the  insured  to  the  extent  of  payments 

made  thereon  in  the building  and  additions,  in  course  of 

construction,  including  all  fixtures  installed  therein,  situate 

(Attach  usual  or  required  clauses.) 

BUILDER'S  RISK— CONTRACTOR'S  FORM 

{Oivner's  interest  not  covered) 

$ On  the  interest  of  the  insured  in  the building  and 

additions  in  course  of  construction,  including  all  materials  and  sup- 
plies therefor,  also  all  contractor's  equipment,  while  on  the  site 
of  said  building  or  within feet  thereof,  situate 

(Attach  usual  or  required  clauses.) 

BUILDER'S  RISK   FORM 

{Owner's  and  contractor's  interest) 

$ On  the building  and  additions,  in  course  of  con- 
struction, including  all  permanent  fixtures  and  all  materials  and 
supplies  for  use  in  the  construction  or  completion  of  said  building, 
while    contained    on    its    site    or    within feet    thereof    situate 


(Attach  usual  or  required  clauses.) 

Note. — With  this  form  policy  may  be  issued  to  owner  and  con- 
tractor as  interest  may  appear,  or,  to  either  individually  with  loss 
payable  to  the  other  as  interest  may  appear. 

BUILDER'S  RISK   FORM 

{Uniformity  West) 

$ On  the story roof building,  including 

plumbing,    electric    wiring    and    stationary    heating,    lighting    and 

431 


422  THE   AGENTS    KEY   TO    FIRE   INSURANCE  j 

ventilating    apparatus    and    fixtures    therein;    and    all    permanent  j 

fixtures    belonging    to   and    constituting    a    part    of    said    building,  ; 

which   is   now    in   process   of   erection    and    to   be   occupied   when  i 

completed  as  a and,  when  not  otherwise  insured,  this  item  ( 

shall  also  cover  building  materials  to  be  used  in  the  construction  I 

of    said    building    while    contained    therein    or    on    the    premises  i 

immediately    adjacent    thereto;    situated City   of \ 

Town  of State  of  Ohio. 

It  is  made  a  condition  of  this  insurance  that  the  premises  shall  | 

not   be   occupied  for   manufacturing,   mercantile  or   for    any  other  ; 

purposes  during  the  continuance  of  this  policy,  without  obtaining  ' 
the  written   consent  of  this  company  hereon;    excepting  that  ma- 
chinery  may   be   set   up    and   operated    solely   for  the   purpose    of 

testing  the  same  without  prejudice  to  this  policy.  i 

Caution:    See  that  due  care  is  exercised  in  regard  to  cleaning  i 

up  shavings,  oily  rags,  and  other  refuse.  { 

Any  loss  under  this  policy  that  may  be  proved  due  the  assured  | 

shall   be  payable  to  the  assured  and subject,   nevertheless,  j 

to  all  the  terms  and  conditions  of  the  policy.  ' 

Other  insurance  permitted. 

(Attach  usual  clauses.)  j 

BUILDERS*   RISK  \ 

(S.  E.  u.  A.)  ; 

$.  . .  .On  the story building,  with roof,  its  ! 

additions  and  foundations,  including  permanent  heating  apparatus,  I 

gas  and  electric  light  fixtures  and  wires,  plate  and  stained  glass,  '• 

wall  and  ceiling  decorations,  frescoes,  gas  and  water  pipes,  plumb-  j 

ing,    and    all   permanent  fixtures,   now  in   course   of   construction;  ; 

also  all  material  to  be  used  in  the  construction  of  said  building,  ; 

while  in  and  on  the  premises,  situated  No on  the i 

side    of Street,    Block    No in When    com-  * 

pleted    to    be    occupied    for purposes    only,    provided    the  ; 

consent  of  this  Company  is  endorsed  hereon.  I 

If  the  above  building  is  to  be  occupied  for  manufacturing  pur-  j 

poses,    assured  may  set  up   machinery,  but  warrants   that  it  will  : 

not  be  operated  except  for  testing  purposes,  unless  permission  is  ; 

endorsed  hereon.  j 

Any   loss   that  may   be   ascertained    and   proven   to  be    due   the  i 

assured    under    this    policy    shall    be    held    payable    to as  i 

interest  may   appear,   subject,   nevertheless,   to   all    the   terms   and  \ 

conditions  of  this  policy.  \ 

CONTRACTOR'S  FORFEIT  INTEREST  FORM  i 

On  the  interests  of  the  assured,  as  set  forth  below,  as  contractors  I 

in    building,    additions    and    extensions    in    course    of    construction  ; 

situate   on  premises  of said   interest  to  be  based  upon   an  • 


MISCELLANEOUS  423 

agreement  in  their  contract  whereby  a  forfeit  or  penalty  of  Fifty 
dollars   ($50)    a  day  is  exacted  from  the  assured  if  said  building 

is  not  completed  by (date) 

The  object  of  this  contract  is  to  indemnify  the  insured  for  loss 
by  reason  of  said  forfeiture  or  penalty  which  the  insured  will 
be  obliged  to  pay  on  account  of  their  inability  to  complete  said 
building,  additions  and  extensions,  due  to  loss  or  damage  by  fire 
or  lightning,  occurring  therein ;  it  being  understood  and  agreed  that 
this  company  will  pay  the  insured  Fifty  dollars  ($50)  per  day  for 
each  day  from  (insert  date),  to  the  time  when,  with  ordinary 
diligence  and  dispatch,  said  building,  additions  and  extensions  can 
be  completed  and  the  contract  fulfilled. 

CONTRACTOR'S  INTEREST  FORM 

{Illustration) 

$....0n  the  interest  of  the  insured  in  any  and/or  all  brick, 
slate  roof  dwellings,  completed,  uncompleted  or  that  may  hereafter 
be  erected,  including  all  materials  and  supplies  for  use  in  con- 
struction thereof,  located  at 

It  is  the  intention  to  cover  additions  adjoining  and  communi- 
cating including  foundations,  plumbing,  steam,  gas  and  water 
pipes;  lighting  and  heating  apparatus  and  all  permanent  fixtures; 
plate  and  ornamental  glass  and  fresco  work  without  description; 
also  storm  doors  and  windows,  screens,  screen  doors,  awnings 
whether  in  position  or  stored  in  any  of  said  buildings. 

This  policy  does  not  cover  on  any  dwelling  which  is  the  subject 
of  most  specific  insurance,  except  to  the  extent  of  the  insured's 
interest  therein  which  is   not  covered  by  such   specific  insurance. 

Permission  is  granted  for  other  insurance  without  notice  until 
required;  for  mechanics  to  make  necessary  alterations,  additions 
and  repairs;  to  use  kerosene*  oil,  city  or  natural  gas  and/or 
electricity  for  lighting  and/or  heating  purposes;  to  be  vacant 
as  occasion  may  require. 

Attach  Lightning  Clause. 

Attach  90%   Reduced  Rate  Average  Clause. 

CONTINGENT    LIABILITY    FOR   FINES 

$ On  the  liability  of  the  insured  for  the  payment  of  fines  to 

the  United  States  Government  under  a  contract  dated 

It  is  understood  that  the  foregoing  contract  between  the  insured 

and  the  United  States  Government  is  for ;  that  these  are 

to  be  delivered  as  follows: 

25%  of  the  number  within  two  months  from  the  approval  of 
sample  and  not  less  than  10%  per  month  thereafter;  that  for 
failure  to  deliver  in  contract  time  the  insured  is  liable  to  a  fine 
per  day  amounting  to  l/20th  of  1%  of  the  contract  price,  but  not 


424  THE   AGENTS    KEY   TO    FIRE   INSURANCE 

to  exceed  a  total  fine  of  more  than  10%  of  the  contract  price;  that  ; 

these are  being  or  to  be  manufactured  at 

It  is  hereby  declared  to  be  the  intention  of  this  insurance,  that,  j 
if  by  reason  of  fire  or  lightning  the  above  mentioned  premises  or 

materials  or  stock  are  so  damaged  as  to  prevent  the  delivery  of  j 

the   said within  the  contract  time,   this  Company  shall   be 

liable   to  indemnify  the   insured  for   such  fines   as   he  is   obliged  ; 

to  pay  to  the  United  States  Government  under  the  above  contraa.  ; 

Note: — Policy  written  for  10%  of  the  contract  price.  i 

i 
j 

EXPRESSMAN'S  OR  TRUCKMAN'S  FORM  ! 

$ On  personal  property  of  every  kind  and  description,  includ-  | 

ing  that  enumerated  in  the  policy  on  which  liability  is  required  to  \ 

be  specifically  assumed,  but  excluding  loss  to  accounts,  bills,  cur-  j 

rency,   deeds,   evidences   of   debt,   money,   notes,   or   securities,   the  j 

property  of  the   insured;    also  on   the   interest   of  the   insured  in  j 

and/or  liability  for  similar  property  held  by  him  and  belonging  in  | 

whole  or  in  part  to  others,  or  held  on  storage  or  for  repairs;  all  | 

while  contained,  etc.  j 

(Attach  usual  or  required  clauses.)  \ 

FIRE  PREMIUMS  FORM 

$ On  fire  premiums  paid  by  the  insured  for  (five)  year  term  , 

insurance  (as  per  form  filed  in  the  office  of )   on  building  j 

and  permanent  fixtures  situate 

It  is  understood  and  agreed  that  the  amount  of  this  policy  shall  j 

decrease    at   the    rate    of   $ per    diem    (20%    per    annum) 

until  exhausted  at  the  expiration  hereof.  i 

It  is  further  understood  and  agreed  that  the  liability  for  loss  j 

or   damage  under  this  policy  shall   be  the   percentage  of  loss  or  j 

damage    under    the    insurance    represented    by   the    fire    premiums  I 

above    described,    and    said    percentage    on    such    portion    of    the  j 

amount  of  this  policy  as  remains  in  force  at  the  occurrence  of  a  ] 

fire  shall  be  the  measure  of  loss  hereunder.  l 

THEATRICAL   SPECIAL   INTEREST   FORM 

On    the    following    described    interest    of    the    insurance    in    the 

building   and/or   its   equipment,   known   as   the and   situate  ! 


It  is  hereby  understood  and  agreed  that  the  Assured  under  this 
policy   has   agreed  to  give   20  performances  in   above  theatre. 

Now  it  is  hereby  further  understood  and  agreed  between  the 
Assured  and  this  Company  that  in  event  the  building  named 
above  and/or  its  equipment,  shall  be  destroyed  or  so  damaged 
by   fire  that  the   Assured  is  prevented   from  giving  the  perform- 


MISCELLANEOUS  425 


ances  agreed  upon  and  referred  to  above,  then  this  Company 
shall  pay  the  Assured  the  sum  of  $8,500  for  each  performance  so 
prevented,  but  not  exceeding  $170,000  in  all. 

It  is  understood  and  agreed  that  if  it  be  not  possible  to  rebuild 
or  repair  said  theatre  but  the  Assured  is  enabled  to  make  some 
arrangement  to  give  the  performances  or  any  part  of  them  in 
some  other  building  in  the  same  city,  then  this  Company  shall 
be  liable  for  each  performance  for  the  difference  between  the 
original  guarantee  of  $8,500  and  the  new  guarantee,  if  any.  It 
being  the  true  intent  of  this  Policy  of  Insurance  to  indemnify 
the  Assured  for  any  actual  loss  of  contract  remuneration  which 
they  may  suffer  by  fire  as  above  specified. 

Other  insurance  permitted. 

Lightning  Clause  attached. 

Privileged  to  do  such  work  and  to  use  such  materials  as  are 
usual  in  the  business  of  a  Theatre. 

Permission  for  mechanics  to  be  employed  for  alterations  and 
repairs  in  the  within-described  premises. 

It  is  understood  and  agreed  that  this  Contract  shall  be  pre- 
sumed and  construed  to  have  all  necessary  clauses,  privileges  and 
permissions  that  may  be  necessary  to  keep  it  in  full  force  and 
effect. 


IMPROVEMENTS  INSURANCE 

Improvements  to  the  premises  made  by  the  lessee,  "whether 
they  become  at  once  the  property  of  the  building  owner  or 
revert  to  the  owner  at  the  expiration  of  the  lease,  are  almost 
invariably  a  loss  to  the  lessee  whenever  the  lease  is  can- 
celled, as  under  practically  all  leases  the  cancellation  of  the 
lease  wipes  out  the  lessee's  interest  in  improvements.  Even 
though  the  lease  be  not  cancelled,  a  fire  may  cause  serious 
damage  to  the  improvements,  which  the  owner  may  not  be 
obliged  to  make  good,  and  improvements  insurance  should 
therefore  be  carried  for  protection  against  both  partial  and 
total  losses. 

To  protect  the  lessee's  interest  in  improvements  we  recom- 
mend that  the  building  insurance  and  the  lessee's  policy  cov- 
ering fixtures  contain  a  clause  specifically  excluding  improve- 
ments; that  specific  insurance  for  the  improvements  be  writ- 
ten for  the  amount  of  their  value  jointly  in  the  names  of  the 
owner  and  lessee  as  interest  may  appear,  and  that  the 
owner  and  lessee  also  make  a  separate  agreement  specifying 
the  extent  of  the  latter 's  interest  as  may  be  agreed  upon. 


426  THE   AGENTS    KEY   TO    FIRE   INSURANCE 

IMPROVEMENTS   FORM 

INSURED:    ,    owner,    and ,    lessee,    as    interest 

may  appear. 

$....0n  improvements  made  by  the  lessee  named  herein  to 
the   building  situate 

(Attach  the  usual  clauses,  including  coinsurance  where  build- 
ing and/or  fixtures  would  be  written  with  coinsurance.) 

IMPROVEMENTS  AND  BETTERMENTS  FORM 

$ On    improvements,    additions    and    betterments,    consisting 

principally  of installed  as  a  part  of  the  building  or  perma- 
nent fixtures  by  the  insured,  under  the  terms  of  a year  lease 

dated ,  on  or  in  the  building,  situate 

It  is  hereby  understood  and  agreed: 

That  the  above  building  is  occupied  principally  for pur- 
poses; 

That  this  policy  shall  not  cover  on  building  or  fixtures  outside 
of  the  improvements,  additions  and  betterments  herein  described; 

That  this  Company  shall  not  be  liable  hereunder  for  any  loss 
to  property  which,  by  the  terms  of  the  aforesaid  lease,  the  land- 
lord or  owner  of  building  is  obligated  to  repair  or  replace. 

(Attach  usual  or  required  clauses.) 

IMPROVEMENTS  AND  BETTERMENTS  FORM 

$ On    improvements,    additions,    and    betterments,    consisting 

principally  of installed  as  a  part  of  the  building  or  per- 
manent fixtures  by  the  insured,  under  the  terms  of  a year 

lease,  dated on  or  in  the  building,  situate 

It  is  understood  and  agreed  that  the  insured's  interest  in  the 
value  of  improvements,  additions,  and  betterments  shall  be  in  no 
greater  proportion  than  the  unexpired  time  of  the  lease  bears  to  the 
full  term  of  the  lease,  and  any  claim  for  loss  or  damage  on  such 
interest  in  improvements,  additions  and  betterments  shall  be 
adjusted  upon  this  basis. 

It  is  also  understood  and  agreed  that  this  Company  shall  not 
be  liable  hereunder  for  any  loss  to  property  which,  by  the  terms 
of  the  aforesaid  lease,  the  landlord  or  owner  of  building  is 
obligated  to  repair  or  replace. 

Other  insurance  permitted  without  notice   until   required. 

Privileged  for  present  communications,  to  work  overtime,  nights, 
Sundays  and  holidays;  to  use  steam,  and  gas  for  heat,  light  and 
power;  to  use  kerosene  oil  stoves,  for  heating  and  cooking  pur- 
poses. 

Work  and  Materials  Clause  attached. 

Mechanics  Privilege  attached. 


MISCELLANEOUS  427 


N.  Y.  Standard  Electric  Light  Permit  attached.  j 

Note. — It  is  preferable,  where  possible,  to  insure  improvements; 

and  building  jointly  in  the  names  of  owners   and  lessee,   as   in-| 

terest  may  appear,  but  the  above  form  may  be  used  when  neces-i 

sary  to  cover  the  lessee  separately.  ] 

LEGAL   LIABILITY   FORM  \ 

(Neav  York)  \ 

{Liability  Disclaimed) 

$ On   their   legal    liability   in   or   for   merchandise,   baggage' 

and/or  freight  held  in  their  custody  as  common  carriers,  ware-j 
housemen,  wharfingers,  forwarders  or  freighters.  i 

The  purpose  of  this  insurance  is  to  indemnify  the  insured  forj 
their  legal  liability,  if  any,  to  the  amount  they  are  obliged  to  pay  ■ 
on  the  above  mentioned  property  by  reason  of  loss  or  damage  by: 
fire,  and  it  is  understood  that  liability  for  such  loss  or  damage  by; 
fire  is  and  will  be  disclaimed  in  bills  of  lading,  shipping  receipts' 
and  other  similar  documents.  \ 

It  is  also  understood  and  agreed  that  all  claims  against  the^ 
insured  (provided  the  claim  or  claims  are  not  in  excess  of  the; 
amount  insured)  shall  be  resisted  under  the  direction  and  controls 
of  this  Company,  the  cost  of  such  resistance  (whether  conducted! 
by  the  insured  or  this  Company)  to  be  paid  by  this  Company  ini 
the  proportion  that  the  amount  of  this  policy  bears  to  the  total  i 
amount  of  such  claim  or  claims. 

In  the  event  of  loss  hereunder  this  Company  shall  be  subrogated 
to  all  claims  upon  owners  of  such  property  to  the  extent  of  pay-; 
ment  made  to  them. 

(Attach  Lightning  and  other  clauses.)  ; 

Note: — Sometimes  in  place  of  the  words  "disclaimed  in  bills  of] 
lading,  etc.,"  the  following  language  is  used:  "Limited  to  their! 
legal  liability  under  the  Bill  of  Lading  approved  by  the  Interstate! 
Commerce  Commission,  June  27,  1908."  This  disclaimer  is  not< 
as  broad  as  the  one  in  the  form.  i 

■] 
LEGAL   LIABILITY   FORM  \ 

{Liability  Not  Disclaimed)  ! 

$ On  their  legal   liability  in   and  for  merchandise,  baggage; 

and/or  freight  held  in  their  custody  as  common  carriers,  ware- I 
housemen,  wharfingers,  forwarders  or  freighters;  also  on  their ' 
interest  in  all  advances  or  other  charges  due  or  to  become  due  1 
upon  all  merchandise,  baggage  and/or  freight,  while  contained  < 
in situate \ 

It  being  mutually  understood  and  agreed  that  if  claim  is  made  I 
against  the  insured  for  merchandise,  baggage  and/or  freight  held  i 
by  them  as  above  provided,  the  insurers  shall  have  the  option  of  ^ 
either  admitting  such  claim  for  payment  or  of  resisting  it  in  court,  J 


428  THE   AGENTS    KEY   TO    FIRE   INSURANCE 

the  legal  expenses  incurred  in  such  resistance  to  be  borne  by  the 
Insurance  Companies  interested  in  the  proportion  that  the  total 
amount  of  insurance  shall  bear  to  the  total  amount  of  such  claim 
or  claims. 

(Attach  Lightning  and  other  clauses.) 

NAVAL   STORES—FLOATER 

{S.  E.  U.  A.) 

$.  .  .  .On  naval  stores  and  empty  packages,  spirits  in  tanks,  owned 
or  held  by  assured  in  trust,  or  on  commission,  or  on  joint  account 
with  others,  or  sold  but  not  delivered,  in  all  or  any  of  the  stores, 

warehouses,  sheds,  yards,   railroad  yards  and  wharves    ( 

excepted),  or  while  in  transit  in,  or  while  on  any  of  the  streets 
in 

It  is  a  part  of  the  consideration  of  this  policy,  and  the  basis 
upon  which  the  rate  of  premium  is  fixed,  that  it  is  expressly  stipu- 
lated and  made  a  condition  of  the  contract  that,  in  event  of  loss, 
this  Compan}^  shall  be  liable  for  no  greater  proportion  thereof  than 
the  amount  hereby  insured  bears  to  the  actual  value  of  the  property 
described  herein  at  the  time  when  such  loss  shall  happen,  nor  for 
more  than  the  proportion  which  this  policy  bears  to  the  total 
insurance  thereon.  If  this  policy  be  divided  into  two  or  more 
items,  the  foregoing  conditions  shall  apply  to  each  item  separately. 

In  the  event  that  an  aggregate  claim  for  any  loss  is  less  than 
Ten  Thousand  Dollars  ($10,000)  (provided,  however,  such  amount 
does  not  exceed  five  per  cent.  (5%)  of  the  total  amount  of  insur- 
ance upon  the  property  described  herein  and  in  force  at  the  time 
such  loss  occurs),  no  special  inventory  or  appraisenient  of  the  un- 
damaged property  shall  be  required.  If  this  policy  be  divided 
into  two  or  more  items,  the  foregoing  condition  shall  apply  to  each 
item  separately. 

Other  insurance,  concurrent  herewith,  permitted  without  notice 
until  required. 

NAVAL  STORES 
[S.  E.  U.  A.) 

Name  of  Assured 

On  Naval  Stores  and  empty  barrels,  spirits  in  tanks,  owned  or 
held  by  the  assured  In  trust  or  on  commission,  or  on  joint  account 
with  others,  or  sold  but  not  delivered,  contained  In  sheds,  ware- 
houses and  on  yards  used  by  the  assured,  and  known  as  Naval 
Stores  Warehouse  Company's  Yards,  in 

The  insurance  also  covers  above  described  property  while  on  or 
In  cars  in  the  yards  named  above. 

It  is  a  part  of  the  consideration  of  this  policy,  and  the  basis 
upon  which  the  rate  of  premium  is  fixed,  that  It  is  expressly  stipu- 
lated and  made  a  condition  of  the  contract  that,  in  event  of  loss, 


MISCELLANEOUS  429    i 

this  Company  shall  be  liable  for  no  greater  proportion  thereof  than  \ 

the  amount  hereby  insured  bears  to  the  actual  value  of  the  prop-  ; 

erty  described  herein  at  the  time  when  such  loss  shall  happen,  nor  j 

for  more  than  the  proportion  which  this  policy  bears  to  the  total  l 

insurance   thereon.     If   this   policy   be   divided   into   two   or   more  | 

items,  the  foregoing  conditions  shall  apply  to  each  item  separately,  i 

In  the  event  that  an  aggregate  claim  for  any  loss  is  less  than  i 

Ten  Thousand  Dollars  ($10,000)    (provided,  however,  such  amount  i 

does  not  exceed  five  per  cent.   (5%)   of  the  total  amount  of  insur-  ! 

ance  upon  the  property  described  herein  and  in  force  at  the  time  j 

such  loss  occurs)   no  special  inventory  or  appraisement  of  the  un-  i 

damaged  property  shall  be  required.     If  this  policy  be  divided  into  j 

two  or  more  items,  the  foregoing  condition  shall  apply  to  each  item  J 

separately.  ; 

This   policy  shall   cover   any  direct  loss  or  damage  caused   by  \ 

lightning    (meaning    thereby   the    commonly    accepted    use    of    the  j 

term   lightning),    and   in   no   case   to   include    loss   or    damage   by  ; 

cyclone,  tornado  or  wind-storm,  and  not  exceeding  the  sum  insured,  i 

nor  the  interest  of  the  insured  in  the  property,  and  subject  in  all  :■ 

other  respects  to  the  terms  and  conditions  of  this  policy.     Provided,  j 

however,  if  there  shall   be   any  other  insurance  on  said  property  j 

this  Company  shall  be  liable  only  pro  rata  with  such  other  insur-  j 

ance  for  any  direct  loss  by  lightning,  whether  such  other  insurance  ; 

be  against  direct  loss  by  lightning  or  not.  [ 

The   property  covered  by   this   policy  may   be    pledged   without  ] 

notice  as  collateral  security  for  loan,  but  loss,  if  any,   under  this  i 

policy  shall  be  adjusted  with  the  assured,  and  is  payable  only  to  ; 
the  assured  or  their  order  endorsed  on  or  attached  to  this  policy. 

Other  insurance  warranted  concurrent  herewith,  permitted  with-  j 

out  notice  until   required.  j 

\ 

NURSERYMAN'S    FORM  \ 

(Advances)  ! 

$ On  advanc_es   actually  made  by  the  insured  to   agents  for  i 

goods  sold,  it  being  the  intention  of  this  insurance  to  reimburse  ; 
the  insured  for  such  advances  in  case  goods  sold  are  so  damaged  j 
or  destroyed  by  fire  that  they  cannot  be  delivered,  and  the  in-  I 
sured   is   unable   to    replace   them   in   time    for   delivery,    all    such  I 

advances  being  on  goods  while   contained   in  the building  ; 

and  in  trenches  adjacent  thereto,  situate ■ 

(Attach  usual  clauses.) 

Note. — The    above    insurance    covers    advances    or    commissions 
actually  paid  to  agents.     Goods  are  sold  through  canvassing  agents 
to  whom  commissions  are  paid  weekly  on  receipt  of  orders.    These 
orders  are  taken  during  the  fall  and  winter  for  shipment  in  April,  i 
Should  loss  occur,  it  would  be  difficult  or  impossible  to  replace  the  ; 
goods,  in  which  case  orders  could  not  be  filled,  and  the  advances  ; 
or  commissions  paid  to  agents  would  be  lost  as  well  as  the  value  i 
of  the  goods.  j 


430  THE   AGENTS    KEY   TO    FIRE   INSURANCE 

REINSURANCE  FORM 
{Approved  by  the  National  Board  of  Fire  Underwriters) 

This  policy  is  issued  as  reinsurance  to  apply  to  Policy  No 

of  the Insurance   Company,   and  is   subject  to  the   same 

risks,  privileges,  conditions  and  endorsements  (except  changes  of 
location),  assignments,  changes  of  interest  or  of  rate,  valuations 
and  modes  of  settlement,  as  are  or  may  be  assumed  or  adopted 
by  the  said  company. 

The  amount  payable  under  this  policy  shall  bear  the  same  ratio 
to  the  amount  payable  by  the  reinsured  company  Under  any  and 
all  policies  upon  the  property  specified  and  contained  within  the 
limits  described  herein,  that  the  amount  of  this  reinsurance  in 
force  at  the  time  of  loss  shall  bear  to  the  total  amount  insured 
by  the  reinsured  company  upon  such  property  in  force  at  the  time 
of  such  loss,  and  shall  be  paid  at  the  same  time  and  in  the  same 
manner  as  payment  shall  be  made  by  said  reinsured  company. 

Other  reinsurance  is  permitted  without  notice  until  required. 

Note. — A  copy  of  the  form  attached  to  the  reinsured  policy  is 
also  made  a  part  of  the  form  of  the  reinsuring  policy. 

Where  a  Retainer  Clause  is  desired  to  be  attached  to  the  fore- 
going Reinsurance  Clause,  the  following  is  approved  by  the  Na- 
tional Board  of  Fire  Underwriters: 

Retainer  Clause. — The  reinsured  company  shall  retain  at  its 
own  risk,  on  the  identical  property  covered  at  the  time  of  any 
loss,  by  this  policy,  over  and  above  all  its  reinsurance  thereon,  an 
amount  equal  to  the  amount  of  this  policy  upon  such  property,  and, 
failing  so  to  do,  the  amount  which  would  otherwise  be  payable 
under  this  policy  by  reason  of  said  loss  shall  be  proportionately 
reduced. 

REINSURANCE  FORM 

{Where    one    company    reinsures    the    entire    business    of   another 
Company  in  an   agency) 

This  policy  is  issued  as  a  reinsurance  of  the  entire  liability  of 

the Insurance     Company     under     various     policies     issued 

through  its  agency  at ,  as  designated  in  the  schedule  filed 

with  the  reinsuring  company,  said  schedule  being  made  a  part  of 
this  contract. 

This  policy  is  subject  to  the  same  risks,  conditions  and  endorse- 
ments, assignments,  changes  of  interest  or  of  rate,  valuations  and 
modes  of  settlement,  as  are  or  may  be  assumed  or  adopted  by 
the  reinsured  company. 

Note. — The  schedule  referred  to  usually  contains  the  following 
information  regarding  each  risk  reinsured: — 

Policy  Number,  Name  of  Insured,  Class  of  Property,  Location, 
Amount,  Rate,  Premium,  Term,  Expiration,  and  Amount  of  Earned 
Premium. 


MISCELLANEOUS  431 

SPECIFIC  MACHINES  FORM 

$ On  machines  and  machinery  of  every  description,  together 

with  attachments  and  spare  and  duplicate  parts,  while  held  under 
contract  of  sale  or  purchase,  leased  or  for  operation  on  a  royalty 
basis,  from   (Name  of  lessee)    while  contained,  etc. 

Loss,  if  any,  under  this  policy  to  be  adjusted  with,  payable  to 
and  recoverable  by  the  insured  named  herein. 

(Attach  clauses  appropriate  to  occupancy.) 

FORM  FOR  WALL  PAPER  SETS 

$ On books  containing  sets  of  wall  paper  samples,  it 

being  understood  and  agreed  that  no  one  set  shall  be  valued  at 

more  than  $ ,  all  while  contained  in  the building, 

situate 

(Attach  usual  clauses.) 

BUILDING  (PORTION  ONLY)  FORM 

(Illustration) 

$ On  the  third  story  as  hereinafter  defined  of  the  three  story, 

metal  roof,  brick  and  stone  building,  including  apparatus,  piping 
and  fixtures  for  heating,  lighting  and  water  service,  together  with 
other  permanent  fixtures  attached  to  and  forming  part  of  the 
structure,  including  awnings  therein  and  thereon,  all  situate 

It  is  understood  and  agreed  that  this  insurance  shall  attach 
from  the  top  of  the  floor  timbers  that  are  between  the  second  and 
third  floors,  and  shall  include  all  of  the  building,  apparatus, 
fixtures  and  piping  above  such  point,  except  that  this  insurance 
shall  cover  only  a  one-fifth  proportionate  share  of  the  roof 
structure,  it  being  understood  that  the  insured  has  a  contract 
with  the  owners  in  fee  by  which  the  insured's  ownership  is  de- 
fined as  in  this  paragraph. 

(Attach  usual  clauses.) 

BUILDING  (PORTION  ONLY)  FORM 

(Illustration) 

$ On  a  portion  as  hereinafter  defined  of  the  three  story  metal 

roof,  brick  and  stone  building,  .including  apparatus,  piping  and 
fixtures  for  heating,  lighting  and  water  service,  together  with  other 
permanent  fixtures  attached  to  and  forming  part  of  the  structure, 
including  awnings  therein  and  thereon,  all  situate 

It  is  understood  and  agreed  that  this  insurance  shall  cover  the 
entire  building  and  fixtures,  as  above  described,  up  to  and  includ- 
ing the  floor  timbers  that  are  between  the  second  and  third  floors, 
and  shall  also  cover  a  four-fifths  proportionate  share  of  the  roof 
structure. 

(Attach   usual   clauses.) 


432  THE   AGENTS    KEY   TO    FIRE   INSURANCE 

NOTE: — The  two  foregoing  forms  were  used  to  insure  the  re- 
spective interests  in  a  brick  building,  where  a  lodge  under  a  well 
defined  contract  had  built  the  third  floor  for  use  as  a  meeting 
room.  It^  is  better  practice  in  cases  of  this  kind  to  insure  the 
property  jointly  in  the  names  of  both  parties  "as  interest  may 
appear." 

PEDIGREE    DOG    POLICY 

Be   it  known   that is   desirous  of  effecting  an   Assurance 

on   the    life    of named Reg.    No during   the 

period    from    noon day    of 19 to    noon 

day  of 19. . .  .for  a  sum  not  exceeding   £ 

And  whereas  the  Assured  hath  paid  the  Underwriters  the  sum 
of as  premium  for  the  said  assurance 

We  the  Insurers  do  hereby  agree  to  bind  ourselves  each  for 
his  own  part  and  not  one  for  another,  our   Heirs,  Executors  and 

Administrators    to    indemnify    the    said in    the    above    sum 

against   the    death   of   the    said from   mortality   by 

(a)  Fire,  Lightning,  and  Accident  as  well  as  the  necessity  of 
its  destruction  arising  from  any  accident  which  may  occur  to  it 
during  that  time   and 

(b)  From  Death  by  natural  causes,  disease,  the  Act  of  God 
or  man,  excluding  poisoning,  but  it  is  herein  provided  that  if 
death  should  occur  from  disease  or  whelping  within  two  months 
of  date  hereof,  then  only  two-thirds  of  such  sum  shall  be  payable. 

This  Policy  only  covers  whilst  the  animal  is  kept  within  the 
United  Kingdom. 

Provided  always  that  the  Assured  shall  cause  every  animal 
insured  to  have  sufficient  and  proper  food,  water  and  shelter, 
and  shall  at  all  times  and  to  the  best  of  his  knowledge  and 
ability  use  and  exercise  every  due  and  proper  precaution  and 
safeguard  against  loss  under  the  policy,  the  intent  and  meaning 
being  that  the  insured  animal  shall  have  the  same  care  and 
attention  as  if  it  were  uninsured. 

It  is  further  provided  that  in  the  event  of  illness  or  accident 
to  the  animal,  the  Insured  shall  at  his  own  expense  immediately 
and  during  such  illness  obtain  the  services  of  a  qualified 
Veterinary  Surgeon  and  shall  give  notice  within  48  hours  to 
The  Managers,  Pedigree  Dog  Policies,  94/5  Cheapside,  London, 
E.G.  3. 

Whenever  Death  shall  occur  to  the  animal  hereby  insured  by 
reason  of  the  negligence,  carelessness  or  wrongdoing  of  any  per- 
son the  Assured  shall  not  claim  or  accept  compensation  from 
such  person  without  consent  of  the  Underwriters,  but  shall  give 
the  Underwriters  all  necessary  information  to  secur'e  such  com- 
pensation and  it  shall  be  the  right  of  the  Underwriters  to  sue 
in  the   name   of  the  Assured   and   recover  compensation  from   the 


MISCELLANEOUS                                           433  ] 

] 

persons   causing  such   death,   and    any   compensation   so   recovered  ; 

shall  be  the  property  of  the  Underwriters  but  not  exceeding  the  ; 
sum  insured. 

No   insured   animal   shall   be   operated   on   nor   destroyed   unless  '■ 

in    the    interests    of   humanity   or    when    deemed    necessary    on    the  ^ 

advice  of  a  qualified  Veterinary.  Surgeon.  i 

We  hereby  further   agree  to  indemnify  the  Assured   against  all  '. 

sums   for   which   he    shall    become    legally   liable   during   the   said  '. 

period    as    and    for    compensation    in    respect    of    personal    injury  ■ 

to  any  person  other  than  a  person  in  the  Assured's  service  directly  : 

or    indiredrly,    or    acting    on    his    behalf    or    his    Employers    or    a  i 

member   of   the   Assured's   family,    caused   by   the   insured    animal  \ 

biting  any  person.-  i 

Provided    always    that   in    no    case    shall    the    Underwriters    in-  \ 

demnify  the  Assured  to  a  greater  extent  than  £lOO  (One  hundred),  ; 

inclusive  of  costs,  charges  and  expenses  payable  to  the  Assured  ^ 
or  any  Claimant, 

The   insured   shall   not,   except   at  his   own   cost,   negotiate,   pay  1 

or  settle  any  claim  without  consent  of  Underwriters.  | 

If  the   risk   specified   shall   be  enhanced  by  any  increase   in  the  I 

number    of    dogs    the    Insured    shall    within    one   week   after    such  i 

enhancement  give  notice  and  pay  such  extra  premium  as  may  be  j 

required.  : 

Upon  the  happening  of  any  event  likely  to  give  rise  to  a  claim,  ; 

due    notice    shall    be    immediately    given    to together    with  j 

all  necessary  information,  ■ 

The    Insured    shall    comply    with    all    statutory    regulations    for  ; 

the  time  being  in  force.  j 

No  other  insurance  permitted.  i 

Any   material    misrepresentations,    omissions    or    concealment   of  I 

any  facts   or  non-compliance  with  or  contravention  of  any  of  the  i 

foregoing  clauses  or   the  making  of   any  claim   knowing  same   to.  ] 

be   false   and   fraudulent   shall    render   the   Policy   null    and   void.  | 

NOTE :    This  is   a  form  used  to  protect   an  installment  j 

furniture  house  against  loss  by  fire  of  any  unpaid  balances  i 

under  the  conditions  named  in  the  form,  the  amount  of  in-  i 

surance   being   the   amount   of   current   unpaid   balances   on  I 

outstanding  accounts.  { 

$....0n  their  interest  as  shown  by  their  accounts  in  merchan-  ; 

dise   consisting  principally  of  household  furniture,  carpets,   stoves  ; 

and   household  furnishings   sold  by  them   under   lease   while   con-  j 

tained    in    buildings    situate    anywhere    in    the    county    of j 

State  of 

It  is  understood  and  agreed  as  follows:  I 

That    this    policy    shall    not    cover    in    any    buildings    in    which  j 

the  ground  floor  is  occupied  for  mercantile  purposes,  nor  in  build-  j 

i 


434  THE  AGENTS   KEY  TO  FIRE  INSURANCE 

ings  occupied  in  whole  or  in  part  for  motion  picture  or  theatrical 
purposes,  nor  in  public  buildings,  nor  warehouses,  nor  in  buildings 
used  for  manufacturing  purposes,  fairs  or  expositions. 

That  this  Company  shall  not  be  liable  for  any  loss  of  less  than 
$10,  nor  for  more  than  $750  under  any  one  account,  nor  $5,000 
in  any  one  building. 

That  the  insured's  interest  is  that  of  lessor  under  leases  which 
provide  that  the  lessees  shall  keep  the  leased  property  insured 
for  the  benefit  of  the  lessor  and  if  any  lessee  shall  provide  good 
and  sufficient  insurance  to  protect  the  lessor  against  all  losses  in 
accordance  with  the  terms  of  said  lease,  this  policy  shall  not 
apply,  nor  shall  this  policy  be  held  as  concurrent  or  contributing 
with  any  such  insurance  in  whole  or  in  part  on  any  of  the  property 
described  herein. 

That  if  any  lessee  shall  provide  insurance  which  through  error 
or  otherwise  shall  not  protect  the  lessor  against  all  loss  in 
accordance  with  the  terms  of  said  lease,  or  shall  fail  to  provide 
any  insurance,  then  this  policy  shall  be  in  full  force  and  effect 
for  such  deficiency  and  the  insured  agrees  to  subrogate  his  right 
of  recovery  in  the  case  of  any  loss  paid  under  this  policy. 

That  for  the  purpose  of  applying  the  90%  reduced  rate  average 
clause  the  insured  shall  furnish  this  Company  on  demand  with  a 
complete  list  of  all  balances  due  on  account  to  which  this  insurance 
applies. 

(Attach  R.  R.  A.  and  other  clauses.) 

GARAGE  OWNER'S  LEGAL  LIABILITY  FORM 

$ On  the   assured's  legal   liability  for  direct  loss  or  damage 

by  fire  to  or  theft  of  automobiles,  commercial  cars,  trucks,  tractors, 
chassis  or  bodies,  not  owned  by  the  assured,  but  the  property  of 
others,  which  are  held  by  the  assured  for  storage  or  repairs,  as 
evidenced  by  the  books,  records  or  receipts  of  assured,  providing 
the   loss   or   damage   occurs   while   the   automobiles   are   contained 

in  the  premises  occupied  by  the  assured  situate  at and  not 

elsewhere. 

Provided  that  this  company  shall  be  liable  hereunder  for  such 
damage  by  fire  or  theft  only  when  such  fire  or  theft  results  from 
the  negligence  of  the  assured  and/or  his  employees  for  which 
damage  the  assured  shall  be  held  to  be  legally  liable. 

It  is  a  condition  of  this  contract  that  the  insured  shall  not 
voluntarily  assume  liability  for  loss  to  any  motor  vehicle  or 
other   property  insured  hereunder. 

This  company  shall  not  be  liable  hereunder  for  any  loss  by 
theft  unless  such  theft  is  of  an  entire  automobile,  commercial  car, 
truck,   tractor,   chassis    or   body   covered   hereunder. 

This   contract  shall   also   cover  legal   expenses  incurred  by  the 


MISCELLANEOUS  435  ] 

assured  with  the  consent  of  this  company  in  connection  with  the  i 

coverage   granted   hereunder,   but   in   no   case    shall    the   company  , 

be  liable  for  a  greater  amount  than  the  sum  insured  under  this  \ 

policy.  ! 

Other  insurance  permitted.  i 

The    terms    and    conditions    contained    in    this    form    supersede  ' 

anything    to    the    contrary    printed    in    the    policy    to    which    this  j 

form  is  attached.  ' 

BUILDING  AND  LOAN  ASSOCIATION  FORM  ] 

(Mortgage  Interest)  \ 
{Uniformity  West) 

$....0n  the  several  properties  on  which  the  Building  and  Loan  ' 

Association   shall    have   substituting   loans    at  the   time   when    any  j 

of  the   said  properties,   during  the   term  of  this   insurance,   suffer  1 

loss   or   damage   by   tornado,   cyclone  or  windstorm  while   located  | 

within   the    limits   of and/or    City   and   County  of \ 

State  of 

This  insurance  being  designed  to  cover  only  the  mortgage   in-  ; 

terest    of    said    Building    &    Loan    Association    in    each    of    said  \ 

properties:    It  is   hereby  made   an   express   condition   of   this  con-  \ 

tract   that   no   claim   hereunder   shall   be   made    against  this   com-  ' 

pany  for  loss  or  damage  by  tornado,  cyclone  or  windstorm  until  \ 

the    loss   or    damage    on    any   specific   building    has    impaired   the  1 

security  of   said  Building   &  Loan  Association   to   such    an   extent  j 

that   the   value   of   land   as    appraised    at   the   time   the   loan   was  \ 

made    and   the   remaining   value   of   the    building   does   not   equal  ■ 
the    balance    due    under    the    mortgage    on    the    specific   property, 

and  then  only  for  the  difference  between  the  value  of  the  prop-  \ 

erty    remaining    and    the    amount    due    on    said    property   not    ex-  \ 

ceeding  $ 1 

In    consideration    of    the    rate    and    form    of    this    policy,    it    is  j 

understood   and    agreed   that   the    liability   assumed   by   this    Com-  j 

pany  hereunder   shall   be  only  such  proportion  of  the   actual   loss  j 

or  damage  above  specified,  as  the  amount  insured  under  this  policy  ' 

bears   to   25%    of   the   total    amount    of   the    outstanding   loans   of  ] 

the  insured  within  the  territory  described  in  this  policy.  ; 

BUILDING  AND  LOAN  ASSOCIATION  1 

(Mortgage  Interest  Form)  \ 

$50,000    on    their    mortgage    interest    in    the    various    buildings  \ 

forming  a  part  of  the  security  upon  which  the  insured  has  made  ! 

loans,  the  liability  of  this  Company  being  limited  as  follows: 
For    loss    arising    through    failure    of    the    owner    of    property 

mortgaged  to  the  insured  to  obtain  fire  insurance  on  the  buildings 

situate    on    such    property    or    the    unintentional    failure    of    the 

insured  to  obtain   such  fire   insurance. 


436  THE  AGENTS  KEY  TO  FIRE  INSURANCE 

For  not  more  than  20%  of  the  amount  of  this  policy  in  any 
one  fire. 

This  policy  is  issued  upon  the  following  representations  by 
the  insured: 

That  it  is  the  practice  of  the  insured  at  the  time  of  making 
mortgage  to  require  the  owner  of  property  mortgaged  to  obtain 
and  file  with  the  insured  fire  insurance  amounting  to  the  face  of 
the  mortgage,  or  if  that  is  greater  than  the  value  of  the  buildings 
then  for  the  amount  of  such  value. 

That  if  such  insurance  expires  and  renewal  has  not  been  received 
by  the  insured  it  is  the  practice  of  the  insured  to  itself  obtain 
the  necessary  amount  of  fire  insurance. 

That  the  amount  the  insured  now  has  outstanding  on  mortgage 
is  approximately  $1,000,000. 

It  is  understood  and  agreed  that  if  the  amount  outstanding  on 
mortgage  at  the  time  of  any  loss  is  more  than  $1,100,000,  then 
this  policy  shall  not  be  liable  for  any  greater  proportion  of  such 
loss  than  the  amount  hereof  bears  to  $1,100,000.  Also  that  in 
event  of  loss  this  Company  shall  be  subrogated  to  all  the  rights 
of  the  mortgagee  to  the  extent  of  the  amount  of  the  loss  paid. 

(Attach  usual  clauses.) 


1 

INDEX  ] 


A  \ 

Abstracts  Form 24$ 

Accrued  Charges  Form ' 27di 

Accounts,  Monthly  34-3fi 

Acetylene  Lighting 12^ 

Act  or  Neglect 20i 

Actual  Cash  Value  (see  also  Sound  Value) 93-9!^ 

Actuarial   Bureau    21' 

Additional  Cost  Indemnity 355* 

Adjustment  Bureaus   27 

Adjustment  of  Losses  (see  Losses) 

Advanced  Rents   357 

Advances   (Nurseryman's),  Form   429^ 

Advertising  by  Agent   12 

Agent,  The 

Act  of 103 

Adjustment  of  Loss   10,  66-69 

Advertising    12 

Analysis   of   Rates    13,  133 

Bad   Debts  42 

Binders    34,  140 

Broker's    Business    16-18 

Certificate   of   Authority 10 

Collections     35,  37-42 

Commissions    16,  17,  37 

Duties    14,  118 

Form    Dissection 13 

General   Office  W^ork    30-54 

Instructions    30 

Knowledge  by  117,  118 

Knowledge    of    Rates ...13,133 

Liability    10,  11,  134 

Limitations     10 

Losses    66-69 

Middleman    14 

Number   of    10 

Obligations    14 

Order  to  Cancel    134 

Own   Property    14 

Preparedness    12-13 

Qualification    Laws    10 

Rate    Dissection    13,  133 

Reinsurance    14,  15 

Resident    10 

Responsibility     11,  117 

437  1 


438  INDEX 

AGENT,  The— Continued 

Selection  and  Inspection   119-130 

Service   13-17-18 

Soliciting    12 

Underwriting    by    121 

Value     16-18 

Waiver    and    Estoppel 11,  66,  116 

Work 12 

Agreement,  Appraisal    .69-74,  111 

Agreement,  Non-Waiver  75 

Agreements,  Special   204-214 

Aircraft    Insurance    27,  173 

Albany  Rule   (Apportionments)    80 

American  Agency  System 10,  118 

Analysis  of  Rates 13,  133 

Apartment  House  Form   (see  Residence  Property) 

Application   a   Warranty    106 

Application  of  Insurance    113 

Apportionments  78-87 

Nonconcurrent   Insurance    

Legal    Maxims    78 

Appraisals    69-74,  111 

Appraisers    Ill 

Approved  Securities   4-5 

Arson   Bureau    21 

Art  Dealers'  Form 251 

Art  Gallery  Form 251 

Ashes    128 

Assignment    61,  100,  101 

As   Interest   May   Appear 56,  99,  206 

As  Now  or  Hereafter  Constituted 56 

Associations    19-29 

Assured    (see  Insured) 

Automobile  Insurance    27,  174-178,  219 

Automobile  Conferences 27 

Automobile  Garage  Form  305-308 

Repair   Shop   Form    305-308 

Average  Clause   (see  Co-insurance  Clause) 

Average,  Law  of  119,  120 

Average  Lines  120 

Average  Rates , 131 

Average  Risks 120 

B 

Balances,  Company 34 

Bankruptcy    100 

Barge  Form    313 

Barns  (Private)   Forms   (see  Residence  Property) 

Barns   (Public)    Form   ! 259 

Betterments 89,  425 


INDEX  "^  439 

Binders   ^^ 

Cancellation   of I'^O 

Bituminous  Coal  Form  and  Clause 214-294 

Blanket    Forms    167,  248,  282 

Blanket  Policies    199 

Blanket  Rates 131 

Blowers    125 

Boarding  House  Forms 255-261 

Boat   (Gasoline)    Form    311-319 

Boilers    127 

Bonds  and  Mortgages    (see  also  Mortgage  Interests) 207 

Books    HO 

Broker,    The 16-18 

Brokerage    16 

Building    (portion   only)    Form 431 

Building  &  Loan  Mortgage  Interest 435 

Builders'  Risk  Forms 4-21 

C 

Cancellations    41,  42,  134-146 

Legal  Methods   134-146 

Partial     63 

Notices    (see  Notices  of  Cancellation) 

Cannery  U.  &  O.  Form 392 

Capital  Required  (Co's)    4 

Card  Filing   51 

Card  Systems   40-53 

Care  and  Cleanliness   128 

Caretaker 105 

Car  Ferry  Form    ■ 313 

Cargo  Carrier  Form    315,  319 

Cash   Value    (see   also  Sound  Value) 93-97 

Cause   of   Fire    68 

Cease  Operations   104 

Central  Lighting  &  Traction  Bureau 25 

Certificate  of  Insurance  64,  65 

Change   of  Interest    61,  101 

Charges,   Grain    265 

Charges,   Storage    276 

Chattel  Mortgage    90,  154 

Cheese  Factory  Form  287 

Chemical  Laboratory  U.  &  O.  Form 393 

Chimneys    125,  126 

Concrete — Flue  Lining — Standard 

Church  Forms   237-239 

Civil   COxMmotion    180 

Clauses — Miscellaneous   212-213 

Cleanliness    128 


440  INDEX 

Clothing  Forms 

Floater    411 

Manufacturing    286 

Spongers     286 

Club    House   Forms   258-261 

Coal   (Bituminous)   Form     294 

Coal  Mining  Forms 

Plant    292 

Use  and  Occupancy    388 

Coinsurance  Clauses 

Explanation    157-164 

Cotton    Form    of 322 

Floating    163 

Other   Names   for    157 

Permits    Other    Insurance 164 

Theory  of    161 

Specific    Items    163 

Use  and  Occupancy 374 

Wording    157,  158 

Conditional    212 

If   other   insurance  subject   to 212 

Coinsurance  Rates    131 

Cold  Storage  Forms    262-276 

Collateral   Loans    (Banks)    155 

Collection  of  Premiums   35,  37,  42 

Methods — Systems 

College  Forms  242 

Collision    Insurance    175 

Color  System  52 

Commercial  Agency  Form    253 

Commissions    16,  17,  37 

Commission  of  Authority,  Loss  of 15 

Commission    Clause    208-210 

Commissions  Insurance   (see  Profits  Insurance) 

Company's   Instructions    53,  134 

Companies 

Domestic — Foreign    4 

Mutual    6-7 

Stock 2-5 

Compress  Form    (Cotton)    334 

Concealment    98 

Concrete  Chimneys 125,  126 

Concurrent    (see  Nonconcurrence) 

Conditions.    (Policy)    General   204-214 

Conflagrations   2-3 

Consequential   Damage    89,  273 

Loss    (see  Losses) 

Constituted,  As  Now,  etc 56 

Contingent  Liability  Form 423 

Contract  Divisible — Severable   207 


INDEX  '  441 

Contracts  of   Sale 89,  100,  208 

Contract,  The  Policy   (see  Policy  Contract) 

Contractors'   Forfeit  Form    422 

Contractors'   Interest  Form    423 

Contractors'  Plant  Form   314 

Cotton  Co-Insurance  Clause    322 

Cotton  Insurance  Association   24 

Cotton  Fire  &  Marine  Association    24 

Cotton   Insurance   Forms    322-347 

Bales    on    Plantation    332 

Buyers   Transit    340 

Clauses    • 322-327 

Compress    334-337 

Excess     339 

Floaters    333,  335,  336 

Ginnery     327-331 

On   Plantation    332 

Cotton   Replacement  Clause    326 

Cotton  Seed  Oil  Mill  Form 343-347 

Contribution    112 

Correspondence   52 

Cost  of  Replacement    (see  Replacement) 
Country  Estate  Form   (see  Residence  Property) 

Country  Store  Form    249 

Creamery   Form    287 

Crqmie  Rule    ( apportionments) 78,  79 

Crop   Insurance 178 

Customs   Duties 262 

D 

Daily  Reports    32-36 

Dean  Schedule  132 

Deed,  Trust   4,  207 

Denial  of  Liability  118 

Deposits    4 

Depreciation    88,  95,  96 

Descriptions    ^ 59,  212 

Diagrams   33 

Direct   Loss    91-94 

Distribution   Clause    164-168 

Meaning,   Advantages,   Disadvantages,  Requirements,   Use. 

Divisible   Contract    207 

Dock  Company  Form    294 

Dog  Insurance 432 

Domestic  Companies    4 

Dredge  Form    314 

Dry  Mixing  Fertilizer  Plant  Form 288 

Duplicate   Policy    64 

Duty  of  Insured   (see  Insured) 

Dwelling  Forms    (see  Residence  Property) 

Dynamo  Clauses  205-312 


442  INDEX 

E 

Earthquake  Insurance   180 

Eastern    Union    22 

Electrical  Inspections  25 

Electrical  Code 26 

Electricity   127 

Electric  Light  &  Power  Plant  Forms 298-301 

Elevator  Forms  262-276 

Endorsements    55-65 

Assignment  of  Interest   61 

Changes,    Various     60 

Mortgage   Claim   Satisfied    63 

Partial    Cancellation    63 

Reinstatement  of  Loss 63 

Removal    61-108 

Environment    123 

Estates  57 

Estoppel    (see   Waiver   and  Estoppel) 

Examination  Under  Oath   110 

Excavations    206 

Excess  Insurance   (including  forms) 407-420 

Excess  Floater  Forms   407-420 

Exclusion  Clauses  211 

Expirations    44-52 

Expiration  of  Policy   58 

Explosion   Conferences    27 

Explosion   Insurance    27,  181-183 

Explosion  Loss   91,  92 

Export  Marine  Policies  320 

Exposure    129,  130-214 

Limit  of  Danger,  Degree  of  Safety. 
Expressman's   Form    424 

F 

Factory  Insurance  Association  23 

Farm   Application    234-235 

Farm  Form    (see  Residence  Property) 

Federation  of  Insurance  , ,     19 

Fertilizer  Plant  Form    288-291 

Filing  Cards   41,  51 

Fines   (Liability  for),  Form    423 

Finn  Rule  (apportionments)    80-81 

Finn  Rule,  Simplified   81 

Fire,  What  Is   91,  92 

Friendly,   Hostile. 

Fire  Cost 2 

Fire  Insurance   1,  2,  112 

Nature   of 1 

Universal    Contract   1,  90 

By  Whom  Furnished   2 


INDEX  443 

FIRE  INSURANCE— Continued 

Basis    of    Credit    1 

Economic    Importance    2 

Necessity    1 

Useful    Purpose    1 

Application  of    112 

Contribution   of    112 

Conflagrations     .' 2 

Fire  Cost   2 

Indemnity     1 

Premium     1 

Trade  Profit   2 

Underwriting  Profit   2,  3 

Solvent  or  Insolvent 112 

Valid  or  Invalid 112 

Fire  Patrols    27 

Fire  Premiums   Form    424 

Five  Per  Cent  Waiver  Clause 162 

Fixtures  and  Furniture 

Value  of   96,  97 

Forms  245-254 

Flat  Rates  131 

Floating  Coinsurance   Clause   163 

Floating  Insurance  407-420 

Floating  Rates   131 

Floater  Forms   188,  190,  191,  407-420,  428 

Clothing    411 

Cotton    ■ 333-336 

Excess    407-420 

Gas  Company  Liability 417 

Laundry    414 

Manufacturing    412 

Naval    Stores    428 

Telephone    Company    416 

Theatrical    412-413 

Tourist   190 

Flood   Insurance    184 

Flue   Lining    125 

Foreign   Companies    4 

Foreclosure  Proceedings   ' 101 

Forfeit  Form  422 

Forms    13,  14,  197-436 

Building   198 

Details    197 

Furniture  and  Fixtures   199 

Ideal    197 

Machinery 199 

Special    Agreements    204-214 

Stock    199 

Title  &  Interest 197 


444  INDEX 

FORMS— Continued 

Valued     201-203 

Various    197-436 

Writing     197-203 

Foreclosure  of  Mortgage  207 

For  V^hom  It  May  Concern   57 

Foundations 206 

Freight   Interest    321 

Friendly  Fire    92 

Full  Contribution  Mortgagee  Clause   149 

Furniture  and  Fixtures  199 

Value  of   94,  96 

Forms  245-254 

Fur  Storage  Forms   274-275 

G 
Garage   (Private)   Forms   (see  Residence  Property) 

Garage   (Public)   Form   305-308 

Garage  Owners  Legal  Liability  Form 434 

Gas   Engines    127 

Gas  Lighting  126 

Gasoline  Boat  Form  316 

Gasoline   Engines    127 

Gasoline  Lighting  126 

Gasoline  Yacht  Forms  316 

General  Adjustment  Bureau  27 

General  Average  and  Salvage  Clause  311,  312 

General  Policy  Conditions    205-214 

General  Cover  Contracts   408 

Form    of    417 

General  Office  Work  30-54 

Balances    37-41 

Binders    34,  140 

Card   Systems    40-53 

Collection   of  Premiuins    35,  37,  42 

Commissions    16,  17,  37 

Correspondence    , 52 

Daily  Reports   32-36 

Expiration   Systems    44-52 

Instructions 53 

Loss   Blanks    : 30-32 

Lost  Policy  . 30-32 

Monthly    Accounts    32-51 

Office  Systems   30-54 

Registers     30-43 

Reporting  Losses   53 

Separate   Bank   Accounts    39 

Supplies    30 

General  Privileges    205-214 

General  Storage  Forms  262-276 

General  Use  &  Occupancy  Form   381-406 


INDEX  445 

GiESSE  Rule    ( apportionments)    84 

Gins    (Cotton)    Forms 327-331 

Goods  in  Bond    262 

Gradual  Deduction  Rule  (apportionments) 81 

Grain  Charges  Form    265 

Grain  in  Elevator  Forms  264-270 

Grain  on  Farm  Form    236 

Grain  (Open  Policy)  Form  268 

Griswold  Rule    (apportionments)    80-81 

Ground  Rents 357,359 

Guests'  and  Servants'  Clause   210 

H 

Hail   Associations    28 

Hail  Insurance   28,  184 

Hardwood  Lumber  Clause    297 

Hazard,  Increase  of  102-104,  121-123 

Hazard,    Moral    103,  121-123 

Hazard,  Physical   123-130 

Hazard,  Temperamental   122 

Heating 124,  125 

Heirs  and  Assigns 206 

Hostile   Fire    92 

Hot  Air  Pipes   124 

Hotel   Forms    255-261 

Hotel  Use  &  Occupancy  Forms  395,  396 

Household   Furniture,   Value    96 

Forms    (see   Residence   Property) 

Housekeeping   128 

Hull  Policies    321 

I 

Ice  Plant  Form    301 

Import  Marine  Policies 321 

Improvements  and  Betterments    89,  425 

Forms  for  Writing  426 

Indemnity    (Fire)     1,  2,  89 

Indirect  Loss   (see  Losses) 

Inquiries 118 

Inspections    128-130 

Inspection  Bureaus  25 

Inspections,  Electrical   25 

Insolvent  Insurance  113 

Installment  Purchases    212-213 

Instructions    53,  134 

Insurable   Interests    89 

Insurance 

Aircraft 173 

Automobile    174 

Collision    175 

Crop    178 


446  INDEX 

INSURANCE— Continued 

Earthquake    ; 180 

Explosion    180 

Fire    (see  Fire  Insurance) 

Flood    184 

Hail     184 

Parcel  Post   185 

Property  Damage    176 

Radium     187 

Rain    - 187 

Registered  Mail  188 

Salesmen's    Samples    188 

Sprinkler   Leakage    189 

Transportation    191 

Trip   Transit    191 

Tornado     190 

Tourist  Floater    190 

Water    Damage    . .  / 193 

Windstorm   190 

Insurance  Companies  1-9 

Insurance    Federations    19 

Insurance  Library  Association  28 

Insurance  Society  of  New  York 28 

Insured    55-58,  88,  99-101,  107-110,  204 

Demand  Upon    110 

Duty  in  Case  of  Fire   107 

Duty  in  Case  of  Loss  108 

Read   Policy    204 

Responsible  for  Agent 103 

Interest  55,  56,  61,  99-102,  148,  197 

As  May  Appear   55,  99,  206 

Change   of 61,  89 

Contract  of  Sale    89,  100,  208 

Insurable    89 

Not  Truly  Stated 99 

Ownership    99-102,  148 

Payee     147-156 

Sale  of   100 

Inter-Insurance    Associations    6-9 

Invalid  Insurance  113 

Inventory 107,  108,  213 

Inventory,   Waiver  of.   Clause 162 

Iron   Safe  Clause   213 

J 

Jewelers'  Form   249 

Judgment  Rates    131,  132 

Junior  Mutuals  9 

K 

Kerosene  Oil  Lamps    127,  205 


INDEX  447 

Kerosene  Oil  Stoves  205 

KiNNE  Rule   (apportionments)    80,  81 

L 

Laboratories,  The  Underwriters   21-22 

Land  Commission  Records  Form  253 

Launch  Forms   318,  319 

Laundry  Floater  Form   414 

Law  of  Average   119-120 

Leakage    (Sprinkler)    Insurance    189 

Leasehold    89 

Leasehold   Insurance    360-369 

Leased  Land  207 

Legal  Liability  Forms  427-428,  434 

Legal  Tender   137 

Liability,  Denial  of  118 

Liability  for  Fines  Form  423 

Liability    (Legal )    Form    427 

Liability,   Limit  of,   Rule    (apportionments) 83 

Liability  (Policyholders')  Mutual  Cos 7 

Library  Forms    237,  243 

Lighter   Form    313 

Lighting    126,  127 

Lightning    89,  205,  3 12 

Limit  of  Liability  Rule  (apportionments) 83 

Limitations  of  Agent's  Authority  11,  12 

Limitation    Clause    163 

Lines,  Average    120 

Linotype  Company  Form  284 

Lithographer's  Form    284-285 

Livery  Stable  Form  259 

Loans  on  Collateral 155 

Local  Boards    19-20 

Local  Rules 198 

Locations  59 

Location    Cards    46 

Lodge  Fixtures  Forms    260 

Lloyds  Groups  8 

Loss  Blanks   30-68 

Loss  Clause,  Three-Fourths 169,  170 

Loss  Payable  Clause   (see  Payee  Interests) 

Loss  Report   68 

Losses    14,  53,  66-87,  91-97,  107-110 

Adjustment  by  Agent    66-69 

Agent's   Duty    66 

Appraisal    69-73 

Apportionment    77-87 

Cause   of  Fire    68 

Companies'    Attitude 67 

Direct-Indirect    91-94 


448  INDEX 

LOSSES— Continued 

Explosion   93 

Giving  Advice 66,67 

Non-Waiver  Agreement  74,  75 

Papers  Required 68 

Protecting   Property    67 

Reinstatement    63 

Reporting    14,  53,  66,  68,  108 

Smoke    92 

Soot     92 

Sound    Value    68,  94-97 

Subrogation    76,  114 

What   To    Do    66 

What  to  Avoid  Doing 66-118 

Lost  Policies  ( also  Vouchers)   30 

Lumber  Forms 295-297 

M 
Machinery 

Value    94-96,  199 

Care   of    127 

Greasing    67 

Forms    277-291 

Machines    (Specific)    Form    431 

Magistrate's  Certificate   110 

Mail  Package  Conference   28 

Mail  Package  Insurance  28,  185 

Make-up  of  Rate    13 

Manufacturing  Property   198 

Manufacturing  Property  Forms   277-291 

Manufacturing  Use  and  Occupancy  Forms 381-406 

Profits   Only    388 

Marine  Insurance   320 

Market  Value    95 

Matches  128 

Mercantile  Property   198 

Mercantile  Building  and  Stock  Forms  245-254 

Mercantile  Use  and  Occupancy  Forms  387-406 

Profits   Only    388 

Merchandise   (see  Stock) 

Merchandise  Floater  Forms  408-412 

Mergenthaler  Form 284 

Middleman 14 

Minimum  Rates 131 

Miscellaneous 

Clauses    212-213 

Forms    292-310,  421-436 

Misrepresentation    98 

Monthly  Accounts  , 34-37 

Moral  Hazard 103,  121-123 

Morristown  Rule  (apportionments)   86 


INDEX  449 

Mortgage  (Mortgagee)  Interestj.  .  1,  63,  138,  142,  147-156,  207,  435 

Building  &  Loan 435 

Foreclosure    207 

Multiple   153 

Satisfied    63 

Mortgagees,  Chattel    90,  154-156 

Mortgagee  Clauses 

Explanation    of    147-156 

Full  Contribution  149-150 

Non-Contribution    149-150 

Personal    Contract    152 

Separate  Contract   149 

Liability   for   Premium    151 

Cancellation    138,  142,  151 

Subrogation 151 

Mortgagees,  Second  153 

Mortgagees,   Subsequent   153 

Motion  Picture  Theatre  Form  309 

Motion  Picture  Theatre  Use  and  Occupancy  Form 396 

Mutual    Companies    6-9 

Method  of  Operation,  Policy  Holder's  Liability,  Deposit  Pre- 
mium, Ordinary  Premium,  Non-Assessable,  Junior,  Senior. 

N 

National  Aircraft  Underwriters  Association 27 

National  Association   of  Local  Agents 19 

National  Board  of  Fire  Underwriters 20 

National  Fire  Protection  Association 22 

National  Electrical  Code 26 

Naval  Stores  Form   428 

Neglect    208 

Negligence   114,  208 

Net  Earnings  Insurance    (see   Use   and  Occupancy) 
New    York   Standard   Policies    (old    and   new)     (see   Policy 
Contract) 

New  York  Loss  Committee  Rule   (apportionments) 83 

Non-Concurrence  77-87,  200 

Non-concurrence  Rules  for  Apportionment '.  .77-87 

Non-Contribution   Mortgagee   Clause    149-150 

Non-Waiver   Agreement    74-75 

Noon  107,  206 

Notice  of  Cancellation 

Address   

Binders    

Forms     

Legal   Methods    

Legal  Notice 

Legal   Tender    

Personal    Delivery    

Premium  Paid,   Unpaid 


134-146 


i  134-146 


450  INDEX 

Notice  of  Cancellation — Continued 

Proof   of   Receipt    

Registered  Letter    

Receipt  by  Broker    

Receipt  by  Employee   

Receipt  by  Insured  

Return   of   Premium    

Service  of 

Signature  to  Receipt   

Time  Necessary    

To   Mortgagee    

To    Payee    

Who  May  Give 

Notice  of  Fire  or  Loss   14,  53,  66-68,  107-108 

Nurseryman's  Advances   Form    429 

O 

Obligation,  By  Agent 14 

Occupancy    60 

Office  Building  &  Contents  Form  251-252 

Office  Furniture  &  Fixtures  Forms 245-252 

Office  Records,  Systems,  Work   (see  General  Office  Work) 

Office    Supplies    30 

Oil  Insurance  Association    24 

Oil  Tank  Form 297 

Oils  and  Grease  128 

Omnibus  Risks  123 

Open  Policy  Certificates  and  Forms 269-270 

Open  Policies,  Marine  321 

Origin  of  Fire  68 

Other  Insurance   205 

Over   Insurance    122 

Ownership    99-100,  147 

P 

Pacific  Board  of  Underwriters 23 

Page  vs.  Sun  Rule  (apportionments) 78 

Parcel  Post  Insurance   185 

Partial   Cancellation    60 

Pawnbrokers'  Form   250 

Payee  Interests    138,  147-156 

Notice  of  Cancellation 138,  144 

Payment  of  Losses  68 

Pedigree   Dog  Policy    432 

Percentage  Value  Clause    (see   Coinsurance   Clauses) 

Perpetual   Policies    59 

Personalty    90,  96 

Photographers'  Form  250 

Physical  Hazards    103,  123-130 

Pile  Drivers'  Form  313 


INDEX         •  451 


Pipes    125 

Heat,  Smoke,  Stove,  Hot  Water  and  Steam. 

Plans    110 

Pleasure  Boat   (Gasoline)    Form    316 

Policies,  Blank    30,  55 

Policy  Certificate    64,  270 

Policy  Changes  60-65 

Policy  Conditions   (General)    205-214 

Policy  Contract,  The   88-115 

Explanation,  Nature  of.  Various  Conditions. 

Policy,  Duplicate  64,  65 

Policies,    Lost 30 

Policies,  Perpetual   59 

Policy,    Reinstating    134 

Policies,   Valued   201,  202 

Policy  Void  117,  1S4,  145 

Policy-Writing    55-65,  197-203,  204-214 

Amount  58 

Insured    (Title)     55-57 

As  Interest  May  Appear 56,  99,  206 

For  Whom  It  May  Concern  57 

Estates 57 

Commencement    58 

Expiration    58 

Term     58 

Rate     58 

Premium     58 

Descriptions     59 

Location    59 

Occupancy    60 

Endorsements    60-63 

Inquiries     204 

Rubber  Stamps  60 

Signing  Forms  and  Policy 55 

Special  Agreements   204-214 

Usual    Permits 205-214 

Power   127 

Premium  1,  58,  118 

Premiums,    Collection   of    35,  37-42 

Methods,  Systems. 

Premiums    (Fire)    Form    ;  424 

Principles  of  Underwriting  119-121 

Printers'  Forms 283-285 

Privileges,  General  205-214 

Profits   Insurance    370-406 

Definition    380 

Clauses  &  Permits    381 

Forms    381-406 

Proof  of  Loss  68,  69,  108 

Property   Damage   Insurance    176 


452  INDEX 

Pro  Rata  Clause   164-167 

Meaning,    Method    of    Use. 

Protection  Equipment  129 

Public  Building  Form    237,  243,  244 

Public  Library  Forms   167,  244 

Public  Records  Form    243 

Q 

Qualification  of  Agents  Laws 10 

R 

Radio  Equipments    214 

Railroad  Syndicates    25 

Radium  Insurance   187 

Rain  Insurance ?  187 

Rates    13,  58,  131 

Rates  and  Rating  Methods   131-133 

Minimum,    Specific,    Flat,    Coinsurance,    Blanket,    Average, 
Floating,  Judgment,  Schedule. 

Reading  Rule   ( apportionments)    79 

Reading  Rule  Modified   79-80 

Realty 89 

Rebuild    (see  Replacement) 

Receipt  for  Payment  of  Loss 69 

Receiver   in   Bankruptcy    100 

Reciprocals   7 

Records,  Forms  for  Insuring 

Public 243 

Tax  Board,  Title  Company,   etc 252-253 

Reduced  Rate  Average  Clause   (see  Coinsurance  Clause) 

Reduction  Rule,   Gradual   (apportionments) 81 

Registers     , 30,  43 

Registered  Mail  Insurance  28,  188 

Reinstatement 

Of  Loss    63 

Of  Policy   134 

Reinsurance   26 

Reinsurance  Bureau  26 

Reinsurance  Clearing  House    26 

Reinsurance   Treaties 26 

Reinsurance  by  Agent  15 

Reinsurance  Forms    430 

Removal  61 

To   Safety    108 

Rents,  Rental  Value,  Rent  and  Leasehold  Insurance,  In- 
cluding Forms  89,  348-369 

Repairs    (see  Replacement) 

Replacement  Clause    (Cotton)    326 

Replacement,  Cost  of.  Value,  etc .94-97 

Replacement  of  Cancelled  Policy 139 


INDEX  453 

Reporting   Losses    14,  53,  66,  68,  108 

Requirements  of  Companies    4 

Requisition  Blanks   30 

Reserve   4 

Resident  Agents   10 

Residence  Property   (also  Forms) 198,  215-236 

Rice  Rule   ( apportionments)    81 

Rice  Rule   Simplified   81 

Right  of  Subrogation    76,114 

Riot   Insurance    181-183 

Risks,  Average  120 

RiSKSj   Omnibus    , 123 

Rocky  Mountain  Association  , 23 

Rubbish   128-214 

Rubber  Stamps    60 

S 

Sail  Boat  Form    317 

Sale,  Contract  of  89,  100,  208 

Salesmen's    Samples    188 

Salvage    97,  312 

Salvage  Corps   27 

Satisfaction  Piece   97 

Schedule  Rates  and  Systems   132,  133 

School  Forms   239-243 

School  Use  and  Occupancy  Form 397 

Securities  Approved    4-5 

Selection     119 

Senior  Mutuals   8 

Separation  in  Forms  198 

Servants'   Clause    210 

Service 

By  Agent  13 

By   Broker    17 

Shut-Down    104 

Signing  Forms  and  Policies   55 

Smoke  Loss   92 

Society  Fixture  Forms  260 

Soliciting  12 

Solicitors     18 

Solvent   Insurance    113 

Soot  Loss  92 

Sound  Value   (see  also  Cash  Value) 68,  94-97 

Special  Agreements   204-214 

Special  Hazards  Forms    (see  Manufacturing  Forms) 

Specific  Rates   131 

Specific  Machines  Form    431 

Sprinkler  Leakage  Insurance    28,  189 

Sprinkler  Leakage  Conferences 28 

Spontaneous  Combustion  Clause  214 


454  INDEX 

Stable  Forms 

Business  or  Livery ' 259 

Private   (see  Residence  Property) 

Standard   Time    107,  206 

Stock  Companies ' 2,  3,  4 

Domestic,  Foreign,  Requirements. 

Stock   Drying    67 

Stock  199 

Mercantile   Forms 245-254 

Manufacturing  Forms 277-291 

Storage  Charges 276 

Storage  Forms   262-276 

Store  Building  Forms 245-254 

Store  Furniture  and  Fixtures  Forms 245-254 

Street  Railway  Schedule  Form  302 

Street  Railway  U.  &  O.  Form 391 

Strike  Insurance   181-183 

Subrogation    (also  Receipt  for) 75,  76,  114 

Substitution   139 

Sun   Time    107,  206 

Supplies 30 

Systems,  Card  and  Office  (see  General  Office  Work) 

Systems,  Color 52 

T 

Tannery    (Stock)    Forms    286 

Tax  Board  Records  Form  253 

Telephone  Risks  Form    253,  254 

Temperamental  Hazard   122 

Term  Policies   ! 58 

Terminal  Company  Form   294 

Theatre  Forms 308-309 

Theatre  Use  and  Occupancy  Form 396 

Theatrical   Floater    412 

Theatrical  Special  Interest  Form 424 

Theory  of  Coinsurance 161 

Three-fourths  Loss  Clause   170 

Explanation,  Wording. 

Three-fourths  Value  Clause   169 

Explanation,   Wording. 

Titles    55-58,  100,  197 

As  Interest  May  Appear 56,  99,  206 

As  Now  or  Hereafter  Constituted  56 

Title  Company  Form   252 

Tobacco  Barn  Form 310 

Tornado  Associations   28 

Tornado  Insurance   190 

Tornado  U.  &  O.  Forms 370 

Tourist  Floater  Conference  28 

Tourist  Floater  Insurance   190 


INDEX  455 

Tourist  Baggage  Insurance   190 

Tow  Boat  Form   \ 313 

Trade  Acceptances    38 

Trade  Profit  2 

Travel  Insurance   190 

Transportation  Insurance    191 

Trip  Transit  Insurance   191 

Truckman's   Form    424 

Trust  Clause  ; 208-210 

Trust  Deed  4,  207 

Trustee  in  Bankruptcy 100 

Tug  Boat  Form 313 

Two-thirds  Vacancy  Clause   171 

U 

Underwriters  Agencies    6 

Underwriters  Grain  Association   24 

Underwriters  Laboratories   21-22 

Underwriters  Service  Association 23 

Underwriting  by  Agent 119 

Underwriting  Principles  119 

Underwriting   Profit    2,  3 

Universal   Schedule    132 

University   Form    242 

Unoccupancy   105 

Use  and  Occupancy   370-406 

Definition 370-381 

Re   Coinsurance    374 

Clauses  and  Permits 381 

Forms    381-406 

V 

Vacancy    105 

Vacancy  Clause,  Two-thirds  171 

Valid  Insurance  113 

Value  (see  also  Cash  Value  and  Sound  Value) 

Building    

Fixtures    

Household  Furniture   , 

Machinery     

Market     

Personal   Property    

Repl  acement    

Value  Clause,  Three-fourths  170 

Valued  Policies 201    202   203 

Valued  Policy  Law '.201,'  202 

Vendor  and  Vendee   89*  joo 

Vessel  Fire  Register  Warranty   .'  312 

Vessel  Fire  Forms   , 311-319 


94-97 
213 


456  INDEX 


Vessel  Property,  Forms  and  Clauses 311-319  • 

Void  Policy    117,  134,  145  i 

Voucher,  Lost  Policy   30-32  j 

Vouchers 110  I 

W  I 

Waiver  and  Estoppel  by  Agent 11,  66,  74,  116-118  \ 

Waiver  of  Inventory  162  ' 

Waiver,  Right  of  Recovery  76,  114  I 

Waiver  of   Subrogation    76,  114  4 

Wall  Paper  Sets,  Form    431  1 

Warehouse   Forms    262-276  1 

Warehouse    (Close)    Form,  Cotton    334  " 

Warehouse  (Open)  Form,  Cotton 334  i 

Warranty   106  \ 

Waste   128  ; 

Water  Damage  Conference  28  ] 

Water  Damage  Insurance 193  ; 

Watchman    , 190  ■: 

Water  Pails    190  ] 

Western  Factory  Insurance  Association  24  ; 

Western  Insurance  Bureau 22  ! 

Western  Sprinklered  Risk  Association   23  j 

Western  Union  22  j 

Windstorm   Associations 28  i 

Windstorm   Insurance    28  i 

Forms    190  : 

Use  and  Occupancy  Forms 370  i 

Work  and  Materials  Clause  206  \ 

Writing   Forms    197-203  \ 

Writing  Policies    (see  Policy- Writing)  ] 

j 

Y  j 

Yacht  Forms   317-319 


THIS  BOOK  IS  DUE  ON  THE  LAST  DATE 

STAMPED  BELOW                                 ! 

AN  INITIAL  FINE  OF  25  CENTS 

WILL  BE  ASSESSED   FOR    FAILURE  TO   RETURN 
THIS   BOOK   ON   THE   DATE   DUE.   THE   PENALTY 
WILL  INCREASE  TO  SO  CENTS  ON  THE  FOURTH 
DAY    AND    TO    $I.OO    ON    THE    SEVENTH     DAY 
OVERDUE.                                                                                                i 

.,  . ^ 

i. 

2oApr'51cll 

6Apr'5lLl' 

*      30Apr'59AB 

REC'D  LD 

HDD  '\0  W59 

APK  '^^  '^^^ 

1 

LD  21-1007n-12,'43  (8796s) 

t«t,* 


578833 


tr*- 


UNIVERSITY  OF  CALIFORNIA  UBRARY 


